The President knows how to pay for that wall. Trump said last week that he’d pay for a border wall between Mexico and the United States with a 20 percent tax on Mexican imports, though it didn’t take long for aides to walk the idea back. Within hours, they suggested it might be only a 5 percent tax. Or something else. Like all tariffs, this one would be paid by… US consumers.
What does Senator Lindsey Graham think of that? Muy malo. The South Carolina Republican took to Twitter last week: “Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad.”
All kidding aside… TPC’s Howard Gleckman explains the differences between Trump’s “big border tax” and a “border adjustable tax.” They differ in goals, economic effects, transparency, and revenues. In other words, “they could not be more different.”
The GOP is divided over the Affordable Care Act. At their Philadelphia retreat, Republicans were unable to reach any consensus over how they will “repeal and replace” the 2010 health law, including the measure’s $1 trillion in taxes. Some want to repeal those levies immediately. Others want to keep them on the books until their own version of health care takes effect.
The Senate Finance Committee is scheduled to vote tonight on Steven Mnuchin’s confirmation. The panel will decide whether to endorse Trump’s pick as Treasury Secretary. Meanwhile, the Columbus Dispatch reports that staffers at a bank formerly owned by Mnuchin routinely robo-signed foreclosure documents in Ohio instead of individually reviewing them. Mnuchin told the Finance panel that the mortgage company, OneWest, did not use that practice.
Meanwhile, a business cash-flow tax might have a surprising outcome. House Republicans would replace the business income tax with a cash-flow tax. That would allow firms to immediately deduct or “expense” the cost of their investments. TPC’s Lily Batchelder explains how that may even reduce investment by very large and public companies that often respond to “book” tax rates rather than marginal rates.
Is Trump switching tax gears from “reform to relief?” And will congressional Republicans follow? Gleckman explains that Trump aide Kellyanne Conway’s recent change in language might “seem like semantic quibbling. But it is extremely important. A long line of academic research and real-world evidence shows people’s responses to tax policy…is largely based on the way those issues are framed by advocates and opponents.” And “relief” sells better than “cut” or “reform.”
States are writing budgets. Can you do a better job? Well, you can try with a new interactive tool created by the Urban Institute’s State and Local Finance Initiative. It breaks down spending per capita in each state so users can see how many people get a specific service and how much state and local governments spend per recipient. As TPC’s Tracy Gordon explains, the tool “could go a long way toward demystifying state and local budgets and inspiring either greater confidence in government or a rolling up of sleeves to make different policy choices.”
What are the next steps in offshore multinational corporate tax? The Levin Center at Wayne Law hosts a free, half-day conference tomorrow at the Pew Charitable Trusts in Washington DC. The event will be co-chaired by retired Senators Carl Levin and Tom Coburn, MD. Attendees will hear diverse views on how Congress and the new presidential administration can tackle issues related to multinational corporate offshore profits, such as the increasing use of offshore tax havens.
Interested in subscribing to the Daily Deduction, the Urban-Brookings Tax Policy Center summary of the day’s tax news? Sign-up here to get the Daily Deduction delivered to your inbox every morning. If you’d like to tell us about a new research paper or have any comments about our feature, write us at dailydeduction “at” taxpolicycenter “dot” org.
