Brady: “Hard to know” if the TCJA will pay for itself. The former chair of the House Ways & Means Committee, who helped manage passage of the Tax Cuts and Jobs Act, acknowledged on Tuesday that the tax cuts may not pay for themselves. While President Trump and many congressional Republicans promised they would, nearly all independent analysts rejected this view. Now, Brady says, wait. “We will know in year 8, 9 or 10 what revenues it brought in to the government over time.” The federal deficit is nearly 40 percent higher this fiscal year than last. Deficits usually shrink during strong economic times.
House Democrats go after the TCJA tax on fringes of non-profit employees. The Ways & Means Oversight Subcommittee will hold a hearing on “Ending the TCJA Tax on Houses of Worship, Charities, and Nonprofits” next Wednesday at 2:30 p.m. The 2017 law imposed a 21 percent tax on parking, public transportation, and other fringe benefits of churches and other non-profits. The TCJA cut back many similar tax breaks offered by for-profit businesses.
Ohio’s legislature ponders a bigger tax cut. State Senate Republicans have rewritten the House’s $68.8 billion budget. They propose $300 million in annual tax cuts through an 8 percent income tax cut over two years. They hope it will offset a 10.5-cent-per-gallon gas tax increase that goes into effect July 1. Senate Republicans also need to work out differences with the House over a measure to scale back business tax breaks.
Texas Governor Greg Abbot signs property tax reform. The bill became law yesterday. Now city or county governments must secure voter approval before raising more property taxes by 3.5 percent or more.
Massachusetts needs more time to collect a payroll tax to fund family and medical leave. Governor Charlie Baker and state lawmakers agreed to wait three months before implementing the tax. Businesses, which were slated to start collecting the tax on July 1, now will have until fall to prepare for the tax and adjust to any technical changes in the program design. Workers are due to begin receiving Paid Family and Medical Leave benefits in 2021.
There’s no such a thing as a “Netflix Tax” in Chicago. Everybody might be calling Sony’s recent $1.2 million payment to the city a “Netflix tax,” but TPC’s Richard Auxier explains why they’re wrong. You just need to understand the difference between an “amusement” and a “good,” as well as the difference between 1.25 percent and 9 percent.
CNBC poll: Most millionaires support a tax on wealth over $50 million. A majority—60 percent—in CNBC’s Millionaire Survey support such a tax, proposed by Democratic presidential hopeful Elizabeth Warren. She calls for a tax of 2 percent on wealth exceeding $50 million and 3 percent on over $1 billion. Her campaign estimates that this would impact and generate $275 billion in annual tax revenue from 75,000 of the richest families in the US.
Martin Feldstein has died. The long-time Harvard professor, who was among the most influential economists of his generation in both public policy and academia, died at age 79. He was a top economic adviser to President Reagan, advised presidents Bush and Obama, and was president of the National Bureau of Economic Research for nearly three decades. In 1977 he won the John Bates Clark Medal for the nation’s most influential young economist. Prof. Feldstein taught and mentored an extraordinary list of public policy economists including former Treasury Secretary Larry Summers and at least three chairs of the White House Council of Economic Advisers. Among his many interests: taxes and Social Security.
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, 2016.