Heitkamp: Let states try to address Wayfair issues. At yesterday’s TPC event on online sales taxes, Sen Heidi Heitkamp, a leader in efforts to get Congress to address the issue, said US lawmakers should now give states a chance. Last week, the Supreme Court ruled in the Wayfair case that states may require online retailers to collect sales taxes as long as the tax laws don’t hamper interstate commerce. But who should say how to do that? Heitkamp said the states should get first crack.
A new seven-layer post card for the Form 1040. The IRS leaked a draft of its new post-card sized 1040 to The New York Times. To make it fit on a card, the IRS leaves off many preferences that a filer would now need to claim on one of six new worksheets. Since more than 90 percent of taxpayers file their taxes electronically, will they care—or even notice?
But wait, there’s more: “Tax Reform 2.0.” Ways & Means Chairman Kevin Brady, at a Washington Post event, said the White House and House GOP will focus on a “package of two, three, or four approaches with permanency [of individual tax cuts] being one of them.”
President Trump threatens to tax Harley-Davidson. Again. Harley-Davidson announced plans to move some manufacturing overseas to avoid the cost of retaliatory tariffs on motorcycles it exports to Europe. The EU imposed the tariffs in response to US tariffs on steel and aluminum. President Trump responded in a tweet that if the motorcycle maker moves, “they will be taxed like never before.”
Disagreeing with the President: Speaker Paul Ryan. "I think tariffs are basically taxes,” Ryan said. Explaining the impact of US tariff policy on Harley-Davidson, based in Wisconsin, Ryan’s home state: “What ends up happening is you get escalating tariffs and end up raising taxes.”
Shot… Jack Daniel’s Tennessee whiskey prices will climb in the European Union due to the EU’s retaliatory 25 percent tariff on imported US whiskey. While prices vary based on distributors’ and retailers’ decisions, the average price of a bottle will likely climb by about 10 percent over the next two months.
Chaser… Meanwhile, the Tax Cuts and Jobs Act requires churches, hospitals colleges, and other non-profit organizations to pay a 21 percent tax on certain employee fringe benefits. Ways & Means Chair Brady says the provision simplifies the tax code for worker compensation. Religious organizations disagree.
As for interest on the national debt… The Congressional Budget Office reports that without any changes to spending or revenue measures, interest payments on the debt will exceed the cost of Social Security payments by 2048 and US debt levels will top even those of World War II. CBO reports that the TCJA will keep revenues flat as a share of GDP until many of its provisions expire in 2026.
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