Senate Finance Committee to vote on top IRS nominations. The panel may vote today on the nominations of Michael J. Desmond to be IRS Chief Counsel and Justin Muzinich to be Deputy Treasury Secretary. If approved by the panel, the two nominees will join Charles Rettig, the former tax attorney tapped by President Trump to become IRS commissioner, awaiting a Senate floor vote.
Would the Treasury unilaterally index capital gains for inflation? The New York Times quoted Treasury Secretary Steven Mnuchin saying it might: "If it can't get done through a legislation process, we will look at what tools at Treasury we have to do it on our own, and we'll consider that." Not much new there. Mnuchin has been saying pretty much the same thing for months. So has Trump economic adviser Larry Kudlow. But would the Administration really do it, even though legal advisers to President George H.W. Bush concluded Treasury didn’t have the authority to act? TPC’s Len Burman thinks indexing gains is “misguided for both legal and policy reasons.” Among other problems, it would add $10 billion to $20 billion-a-year to the deficit.
The Post-TCJA Economy: Good news, but with warnings. TPC’s Howard Gleckman and Aravind Boddupalli use rthe latest data to track the Tax Cuts and Jobs Act’s impact on the economy. The initial estimate of second quarter real GDP growth was a strong 4.1 percent, the best showing since the same period in 2014. But bond yields are up, and stock prices and wages are flat. Howard and Aravind illustrate why there is little reason to believe last quarter’s burst in growth is sustainable.
Speaking of warnings… The US is on track to borrow the most money since the 2008 financial crisis, says the Treasury Department. Treasury expects to issue $329 billion in net marketable debt from July through September. That’s the fourth largest ever total for the third quarter. Back in April, Treasury forecast it would need to borrow $273 billion during the period.
Thanks to the TCJA, living abroad may cost you more. Bloomberg reports that the TCJA is affecting smaller businesses owned by expatriates. The law imposes new taxes on corporations that have shifted profits overseas. But it sets no floor on annual gross receipts—which means it can hit a business like the one owned by US citizen and expat Travis Baldwin that has four employees and less than $100,000 a year in profits. The taxes are so burdensome, some expats may renounce their US citizenship, or just evade the taxes.
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