Ways and Means bills would cut health care taxes by nearly $100 billion. The panel voted to expand Health Savings Accounts, delay the Cadillac tax on high-cost employer-sponsored health plans, and provide new medical expense deductions for gym memberships and some sporting goods. It would boost the debt by nearly $100 billion over the next decade. The bill has little chance of passing the Senate this year.
On the Hill this week and next: Tariff talk. Yesterday, the House Financial Services Committee shared bipartisan concerns with Treasury Secretary Steven Mnuchin about severe economic damage that could result from trade battles with China and US allies. On July 18, the House Ways & Means Trade Subcommittee will hold a hearing on the effects of tariffs on US agriculture and rural communities. It will address the effects of US tariffs imposed by President Trump as well as retaliatory tariffs imposed by other nations.
Speaking of tariff impacts… The New York Times reports that economists at Princeton and the London School of Economics estimate that Trump’s latest threatened tariffs on $200 billion of Chinese imports would increase household expenses for the average American family by $127 a year.
Treasury has a new deadline for pass-through guidance. The department had hoped to release rules last month specifying which pass-through businesses can claim a 20 percent tax deduction.h Now it is aiming for the end of July. Under a recent agreement, the White House Office of Management and Budget will have a10 days to review the rules. Treasury says it has sent these and three other proposed regs to OMB but, curiously, a “senior administration official” told reporters on background that the budget office had not yet received the rules. OMB is just one block from Treasury, but it is a really long block.
About tax simplification. Politico reports that the American Institute of CPAs has objected to Treasury’s revised Form W-4 for tax withholding. "The draft 2019 Form W-4 is unduly complicated and essentially requires taxpayers to calculate their tax liability. Taxpayers need a Form W-4 that is easy to understand and simple to complete,” the AICPA said.
Still no compromise spending bill from Congress…. The committee responsible for smoothing out differences between House and Senate versions of a three-bill spending deal canceled its meeting yesterday. Congress has until October 1 to pass a spending package to avoid a government shutdown. President Trump says he’ll veto any bill that does not fund his southern border wall.
Missouri Governor Mike Parson signs an income tax cut. The rate will fall from 5.9 percent to 5.5 percent on January 1. If the state meets revenue targets, the rate will gradually fall to 5.1 percent. By 2023, the state expects to lose $5.8 million in revenue from the change.
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