An Appeals Court says an accounting firm must turn over 8 years of President Trump’s tax returns. A panel of the DC Circuit Court of Appeals on Friday upheld a lower court ruling that Mazars USA must provide eight years of accounting records to the House Oversight Committee. Trump is likely to appeal to the full DC Circuit. In a separate case, a federal district court dismissed efforts by Trump to block a New York State subpoena of Mazars for the president’s financial records. Trump and the Department of Justice are now urging a federal appeals court to overturn that decision.
Trump says a partial trade deal with China is in the works. The limited deal would delay a scheduled 5 percentage point tariff increase by the US on $250 billion in Chinese imports that were to go into effect tomorrow. In return, China reportedly agreed to buy between $40 billion and $50 billion in US agricultural products. There is no written agreement.
Saving Free File. After Pro Publica reported early this year that private tax prep companies were burying the IRS program intended to provide free tax filing for many low-income taxpayers, the IRS commissioned MITRE Corp. to do an independent review of the effort. The firm found that five of the 12 tax prep firms participating in Free File effectively hid the product from many of their online customers, yet it urged the IRS to continue to allow the private firms to run the program.
International Monetary Fund: Carbon tax is the best way to combat climate change. In a new report the IMF estimates that a $75-per-ton carbon tax would reduce emissions to a level scientists estimate could limit climate change. That would raise coal prices by more than 200% above baseline levels in 2030.
Are US billionaires really paying a lower effective tax rate than working people? TPC’s Howard Gleckman thinks the answer is “probably not.” The question arises from a new book by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley. They conclude that the richest 400 families in the US paid an average effective tax rate of 23 percent in 2018, while the bottom half of US households paid 24.2 percent of their income in all federal, state, and local taxes. The Problem: Saez and Zucman chose to calculate taxes in ways that were necessarily arbitrary but also quite controversial.
The Tax Cuts and Jobs Act didn’t change by much the amount of tax for most families with children. TPC’s Elaine Maag explains how: “Taken as a whole, the TCJA did reduce near-term taxes for most households. But the provisions intended to broadly subsidize families – repeal of the personal exemption, and increases in the child tax credit, the standard deduction, and the child and dependent care tax credit – kept benefits roughly constant between the old and new law.”
How might the TCJA provide pro-growth, progressive tax reform? TPC’s Len Burman argues that the TCJA could make it possible for working people to fully share in the gains from an expanding economy. “One way to do it: a universal earned income tax credit (UEITC)—a one-for-one match on the first $10,000 of earnings delivered through a refundable tax credit. It’s like the existing earned income tax credit, but is bigger and is available to every worker regardless of family composition or household income. It would also be designed to grow with the economy.”
This Thursday at TPC: Cryptocurrency and Tax Administration. Cryptocurrencies like Bitcoin facilitate anonymous, decentralized, borderless transactions. The IRS has drafted Form 1040, Schedule 1 to account for virtual currency. How are tax authorities responding to new technologies designed to circumvent regulation? Are these responses adequate? TPC and H&R Block will host a discussion of tax implications for cryptocurrencies like Bitcoin. IRS chief counsel Michael Desmond and a panel of experts will discuss evolving federal and state policy issues. The event will be webcast live here on Thursday, October 17, from 9:30 to 11:30 am. You can register to attend here.
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