Finance panel votes today on Mnuchin. Senate Democrats blocked a procedural vote on President Trump’s pick for Treasury Secretary, Steven Mnuchin, delaying consideration until later this morning. Meanwhile, Politico reports that in written comments to committee members, Mnuchin said President Trump might protect mortgage interest and charitable giving from any curbs on deductions: “We will consider eliminating certain deductions other than mortgage or charitable contributions." It isn’t clear how this fits with Trump’s recent proposal to limit deductions to $100,000. The committee also expects to vote on the nomination of Tom Price to be Secretary of the Department of Health and Human Services.
Tomorrow on the Hill. The Senate Budget Committee will vote on President Trump’s pick to run the Office of Management and Budget, South Carolina Representative Mick Mulvaney. Mulvaney would like to reform Medicare and Social Security. He ran into a “nanny tax” issue, but says he saw his hire as a “babysitter” and will address the issue.
Batten down the hatches, state budgeters! TPC’s Richard Auxier warns that state budgets are already causing headaches for governors and legislators across the country: "Two-thirds of states enter the year with deficits, and 32 states spent less in real terms in 2016 than 2008. But states must also shift their attention to the gathering fiscal storm clouds in Washington, DC." To hear more, watch TPC’s panel discussion on the subject.
And in Michigan’s capital, a GOP split over tax cuts. Governor Rick Snyder presents his budget next week, and reminds GOP lawmakers that if they want tax cuts, they have to identify spending cuts, too. Republican leaders want to roll back income taxes and nix the state’s tax on pensions.
Thousands in Detroit are leaving money on the table. About $80 million, to be specific. An estimated 26,000 households in Motor City were eligible for the Earned Income Tax Credit last year but did not file tax returns to apply. Each of the households could be losing between $2,000 and $4,000 this spring.
Tax expenditures drive Iowa lawmakers to look more closely at the state tax code. A bipartisan group was surprised to learn that Iowa racked up $12.1 billion in tax expenditures in 2010. Lawmakers are trying to finalize $118 million in cuts to a $7 billion budget, and want to know which of the state’s 373 separate credits, exemptions, deductions, and exclusions are effective.
“Alternative facts” in Texas mislead on property taxes. Some Republican lawmakers have presented data to support a cap on local property taxes. Problem is, they use a graph that tracks increases in total property tax revenues collected from businesses and homeowners over ten years against median household income growth. The apples-to-oranges comparison shows property tax revenues growing three times as fast as income. In fact, aggregate personal income growth outpaced total property tax revenues over the period. The leading proponent of the faulty line graph, State Senator Paul Bettencourt, discounts criticism. “No matter how you measure it, property taxes have been growing.”
GE is contracting out its tax expertise. General Electric is moving 600 of its tax staffers to PriceWaterhouseCoopers. They’ll serve other PwC clients, too, and GE will get a share of PwC’s associated revenue, reports The Wall Street Journal (paywall). The move should save GE $100 million a year in its five-year PwC contract. After GE’s announcement on January 12, PwC reports that more a dozen Fortune 100 companies called them wanting to know more.
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