Trump promises business tax cuts and a “border tax,” again. He told a group of corporate CEOs yesterday that he’d cut taxes and regulation “massively.” He fudged a bit on his long-held vow to cut business taxes to 15 percent, saying that his goal is to cut the rate to “anywhere from 15 or 20 percent.” He also repeated his threat to hit US firms that shift jobs overseas and import goods with a major tax: "If you go to another country and you decide that you're going to close and get rid of 2,000 people or 5,000 people ... we are going to be imposing a very major border tax on the product when it comes in.” Trump also said that regulatory reductions might be more valuable to businesses.
Mirror, mirror, on the wall… Mexico promises to counter any new US taxes on imports. The nation’s economy minister, Ildefonso Guajardo said “If there is any action that punishes imports to the North American market and encourages U.S. exports, you have to reflect it in a mirror action to counteract the change of incentives that this would make for activity and investment in Mexico.” Mexico’s president, Enrique Pena Nieto, is scheduled to meet with Trump on January 31.
Catch 22 on Trump’s tax returns. After flatly vowing over the weekend that the president would not release his tax returns, top aide Kellyanne Conway reversed course to say that he would not release his returns until after audits are complete. But did she really shift? Presidential tax returns are always under routine audit. For four decades presidents have released their returns, notwithstanding those audits.
Senator Mike Lee of Utah has a corporate tax plan. He would eliminate corporate income taxes but raise the tax rate on capital gains and dividends. “After eliminating the corporate tax, we could raise tax rates on capital gains and dividends all the way up to par with labor income (top rate today: 39.6 percent).” The framework, Lee notes, is similar to one put forth by TPC’s Eric Toder and American Enterprise Institute’s Alan Viard, though their most recent version retains a small corporate tax.
Tanzania considers a tax on charcoal. The nation’s government wants to curb the use of the fuel and thereby reduce deforestation. Under the plan, sellers of charcoal would pay an $11 per 90 kilograms of charcoal at checkpoints in the country’s districts. Tanzania’s parliament will consider the tax in February. More than 915,000 acres of forests are cut each year in Tanzania, much of it for charcoal.
Curious about what the CBO does? The Congressional Budget Office has produced, at the request of the Committee on House Administration and in partnership with the Congressional Research Service, a new video geared toward Members of Congress and staff. The video explains what types of publications CBO produces, what cost estimates are and when CBO prepares them, and how CBO decides what to study.
Today on the Hill. The Senate Finance Committee will hear from Georgia Representative Thomas Price. The orthopedic surgeon is President Trump’s nominee to be Secretary of the Department of Health and Human Services.
Republican Members of the House and Senate begin a policy retreat with President Trump tomorrow. Barring any tax policy developments in the interim, the Daily Deduction will return Monday, January 30.
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