The Trump Administration offers transportation grants to states that raise taxes. While the White House often trumpets its own supports for tax cuts, the Department of Transportation is overhauling an infrastructure grant program to favor states and cities that raise taxes and tolls. Those that do would be more likely to win a share of the $1.5 billion grant pool for roads and bridges.
Iowa GOP plans the largest tax cut in state history. Governor Kim Reynolds and Republicans in the state legislature agreed on a plan to cut state income taxes by $398 million next year for individuals and small business owners, an immediate average tax reduction of 10 percent. By 2023, the measure would collapse nine individual income tax brackets to four. It would cut the top individual income tax rate from 8.98 percent to 6.5 percent and cut the corporate tax rate from 12 percent to 9.8 percent. Lawmakers could begin debating the measure as soon as tomorrow.
And Dems in some states seem to want to give a tax break to the wealthy. The Washington Post considers plans in Connecticut and six other Democratic-leaning states to limit the effects of the cap on the federal state and local tax deduction. Said TPC’s Len Burman, “It's struck me as very ironic that all these liberals are scrambling to come up with tax changes that benefit high-income people.”
Have we started an historic debate over work in the US? The Trump Administration wants to increase US employment through immigration control, tax and tariff policies, and work requirements in exchange for federal safety net benefits such as health and housing assistance. Many Democrats and some Republicans favor expansion of the Earned Income Tax Credit. Other policymakers have proposed a universal basic income or federal job for all. TPC’s Howard Gleckman considers the challenges facing such proposals, all put forth while the US is close to full employment.
Did the Tax Cuts and Jobs Act get the House chaplain fired? Taxes sometimes show up in the strangest places. Last week, Rev. Patrick J. Conroy, announced that he had been fired as House chaplain by Speaker Paul Ryan. The reasons are murky, but Father Conroy told The New York Times it may have had something to do with a prayer he offered during debate on the TCJA. The offending words: “May their efforts these days guarantee that there are not winners and losers under new tax laws, but benefits balanced and shared by all Americans.”
House Ways & Means member resigns. GOP Rep. Patrick Meehan of Pennsylvania, who served on the panel’s Tax Policy and Trade subcommittees, resigned Friday. He said he would reimburse the government for a $39,000 “severance payment” he made from his office account to settle a sexual harassment complaint. In January The New York Times reported that Meehan used taxpayer dollars to pay the settlement.
The EU’s proposed 3-percent tax on digital revenue is no slam dunk. European Union finance ministers met for the first time to discuss the plan, which would affect about 200 companies and could raise additional annual revenues of about €5 billion ($6 billion). Notably, Germany’s finance minister did not commit to the tax, and finance ministers from smaller EU members, like Luxembourg and Malta, prefer a long-term, more comprehensive solution that applies to all member states. The Organization for Economic Cooperation and Development indicated that broader reform efforts are under way, with a blueprint due in 2020.
France just cut its cryptocurrency tax. It has changed the classification of cryptocurrency capital gains. Since 2014, the tax rate had been as high as 45 percent, but now it will be a flat 19 percent. France’s Council of State ruled that cryptocurrency profits are “moveable property,” subject to the lower tax rate.
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