A Trump-like cut could reduce federal revenues by $7.8 trillion dollars through 2026. That’s the new estimate from TPC if tax cuts consistent with President Trump’s April outline become law. When the TPC model includes tax increases either suggested in the Trump outline or during the campaign, the 10-year federal revenue drop would be $3.5 trillion. In that scenario, half of the tax benefits would go to the top 1 percent of earners.
Just in time: The Senate’s first tax reform hearing. The Senate Finance Committee will take place on Tuesday, July 18. The panel will hear testimony on tax reform from four former Treasury tax policy chiefs including TPC’s Mark Mazur. Immediately following, the committee will consider the nomination of David Kautter as Assistant Treasury Secretary for Tax Policy.
Time is running out quickly for the debt limit. Given the latest revenue estimates, the Bipartisan Policy Center projects that the US Treasury will reach its debt limit by the first half of October, as opposed to later in October or November as Treasury previously estimated. The BPC estimate is in line with the latest CBO projections.
A new BCRA today, but governors remain worried. TPC’s Tracy Gordon explains that states stand to lose over $100 billion each year in federal Medicaid dollars. But that’s not all. “Whatever emerges from current negotiations is also likely to restructure tax credits and subsidies now available under the ACA to help low- and moderate-income people purchase health insurance and defray deductibles, copayments, and other out-of-pocket costs.” And the cost of caring for many of the newly-uninsured may land in the laps of the states.
Is Gary Cohn headed for the Fed? Politico reports that top White House economic adviser Gary Cohn may be the leading candidate to replace Janet Yellen as Fed chair early next year. But what does that mean for tax reform? Cohn and Treasury Secretary Steven Mnuchin are the Administration’s two top tax negotiators.
Does this sound familiar? House Republican conservatives and moderates are at loggerheads over a 2018 budget. The Freedom Caucus wants big cuts in mandatory spending and taxes included in a budget package. Moderates want more domestic spending and revenue-neutral tax changes. The Budget Committee is at an impasse. The new fiscal year begins in less than two months and, unlike the Senate, the House still plans to spend all of August on holiday.
Look for CBO’s estimate of President Trump’s proposed 2018 budget today. It could show much less deficit reduction than the White House claimed in May.
France loses its tax battle against Google. A French court determined that Google Ireland Limited does not owe to France’s corporate and value-added taxes from 2005-2010. France’s tax administration had demanded back payments of $1.3 billion, but will not receive them; it has two months to lodge an appeal of the court’s decision.
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