CNBC says Trump’s tariffs are the largest tax increase in decades. Based on Treasury data, the network concludes President Trump’s tariffs are equivalent to the largest tax increase, as a share of the economy, since the Deficit Reduction Act of 1993. The tariffs will total $72 billion this year, or 0.34 percent of Gross Domestic Product, according to the Tax Foundation. The ’93 tax bill increased revenues by 0.36 percent of GDP.
That also means price increases, says Walmart. The big box retail giant warns that increased tariffs on imports from China will mean “increased prices for our customers.” Chief Financial Officer Brett Biggs did not specify the amount of increase or the affected products.
Free File has a friend, sort of. Senate Finance Committee Chair Chuck Grassley seems inclined to keep in a pending IRS reform bill a provision codifying and extending the program. Democrats have been pushing to drop the provision but Grassley suggested yesterday he would not cut it from the broader IRS bill that being considered in the Senate. Grassley had joined top committee Democrat Ron Wyden in demanding the IRS review the program.
Here’s the kicker in Oregon. Thanks to a tax windfall that is raising revenue by two percent above forecast, state residents could receive a $1.4 billion “kicker” tax rebate next year. If state revenue forecasts hold, an Oregonian earning $36,000 annually could receive a $338 credit. A resident with income of $401,000 or more could get as much as $14,000. Democrats in the legislature want to use some of the windfall to reduce the state’s public employee pension debt.
Nebraska has a windfall too, but there will be no rebates. The state should end its fiscal year with $86.5 million, or 15 percent, more in general fund tax receipts than it projected in February. By law, Nebraska will deposit the extra revenue in its cash reserve fund. State tax commissioner Tony Fulton says the windfall could be a one-time thing, adding, “We should probably not count our chickens before they hatch.”
Chicago is the first city to levy a “Netflix tax” successfully. Bloomberg reports that the city has collected $2 million in tax revenue from digital streaming and service providers such as Sony, Eventbrite, and Fandango.The 9 percent amusement tax on streaming services was enacted four years ago. An industry group is suing the city over the tax.
IRS seeks grant applications for Tax Counseling for the Elderly (TCE) Program. The agency is accepting applications for the program via the TCE application package on Grants.gov through Friday, May 31. The package, Publication 1101, is available on IRS.gov. The TCE program trains volunteers to provide tax counseling and return preparation to people who are 60 or older.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at email@example.com.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2020.