Glass half-empty, glass half-full… President Trump said yesterday that his one-page tax plan was just the start of negotiations—he’s even willing to consider raising the gasoline tax to fund infrastructure. The Brookings Institution’s David Wessel says the plan stirred up plenty of dust but settled no disagreements among Republicans in the House, Senate or White House—a sign of “real trouble.” But House Ways & Means Chair Kevin Brady still has hopes for the House GOP plan and its border adjustable tax. His committee will hold hearings on that and other potential changes to the tax code this month. Brady wants a unified plan that the House, Senate, and White House can agree on and remains confident that Congress will enact tax reform this year.
Congress funds IRS, but blocks its ability to regulate some tax-exempt organizations. Congress passed a spending bill Sunday night that will keep the government open through September. PoliticoPro reports (paywall) that the bill holds IRS spending at $11.2 billion, but prohibits the agency from advancing a proposed regulation that would regulate the political activity of tax-exempt 501(c)(4) organizations. The funding agreement also prevents the White House from forcing the IRS to determine an organization’s tax-exempt status.
Kansas still faces a budget shortfall, and its GOP leaders still want to roll back tax cuts. The state’s legislature reconvened this week and plans to renew a debate over increasing income taxes to help fill an $889 million budget shortfall. GOP Governor Sam Brownback vetoed a tax bill in February that would have raised more than $1 billion in new revenue over two years.
Florida’s tax cuts won’t be as steep as promised. Florida’s Senate is likely to pass a much smaller tax cut package than Governor Rick Scott or House Republicans wanted. Of note, a Senate committee nixed a 10-day back-to-school sales tax holiday, opting instead for a three-day sales tax holiday on clothing. Property taxes to support schools will fall next year under the deal, too. The tax cuts total about $75 million—a far cry from the proposed $600 million Scott wanted and the $300 million the House approved.
Was he “watching the detectives…?” An alleged Swiss spy may have been spying on tax investigators in Germany. Those investigators have been trying to buy CDs with information about Swiss bank accounts, data that could help identify tax evaders. The Swiss man, “Daniel M.,” was active in the German financial and banking sector and was trying to find out who bought the CDs and how.
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