The TCJA: Timing is everything for public companies’ accountants. TPC’s Eric Toder explains why in his reflection on last week's conference co-hosted by TPC and the University of North-Carolina Tax Center at the Kenan-Flagler Business School. “President Trump could have given accountants a bit of breathing room had he signed the [Tax Cuts and Jobs Act] after December 31, so that there would have been no effects on deferred tax assets or liabilities for tax year 2017. But he didn’t. And the result is that while accountants may have more lucrative work to undertake, they also have many more headaches.”
Speaking of headaches, how—and when—will Congress fix the TCJA? The Hill reviews the political landscape against a daunting calendar. In a nutshell, when it comes to seeing a technical corrections bill for the TCJA, “Everything tells me it’s a lame-duck exercise,” said Rohit Kumar, a former aide to Senate Majority Leader Mitch McConnell.
How does the TCJA affect tribal areas in the US? The Urban Institute’s Nancy Pindus and Brady Meixell map Opportunity Zones, the tax incentives for investment in poor and undercapitalized communities that were included in the TCJA. “Of 481 tribal census tracts across the country, 248 (or 52 percent) are…eligible for Opportunity Zone designation. All 248 received at least one Opportunity Zone designation... Market forces will determine their eventual impact, but the new zones could shepherd significant new capital to tribal lands.”
How will the TCJA affect low-income families? The Institute for Research on Poverty at the University of Wisconsin-Madison, citing TPC’s Elaine Maag, notes that “After 2025, some but not all of the TCJA’s provisions that directly affect low-income families are set to expire. Without further action, this will result in a tax increase for low-income Americans… [TCJA] tax cuts will result in a revenue loss of $1.7 trillion through 2028. In addition, some politicians are calling for federal spending cuts, which may have implications for low-income families.”
Seattle’s head tax: Never mind. The City Council has repealed its recently-passed head tax on larger employers. The head tax would have imposed an annual $275 per-employee levy on 585 firms with annual gross receipts over $20 million. Amazon, among other large employers, raised hundreds of thousands of dollars to get a repeal vote on the November ballot. One pro-tax council member who backed a boycott against local businesses that supported the repeal, called the decision a “backroom betrayal.”
Meanwhile, Indianapolis may levy a new tax to beautify the city. A City-County Council panel advanced proposals to create three new economic improvement districts (EID) to pay for maintenance, public safety, marketing and economic development. 1,200 commercial and residential downtown property owners would pay $3 million annually over 10 years for the largest of the three EIDs.
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- © Urban Institute, Brookings Institution, and individual authors, 2016.