Why the TCJA may not help Republicans in the fall mid-terms. TPC’s Howard Gleckman explains why it’s not likely, citing a new paper by colleague Vanessa Williamson. One would think that tax cuts are a sure winner as a Republican campaign issue, but “by passing a tax cut 11 months in advance of a congressional election and doing so without taking the time to build public support for the law, Republicans may have seriously miscalculated.”
Congress is back. The Supreme Court nomination of Brett Kavanaugh is at the top of the agenda, but fiscal issues are simmering just below the surface. Congress must finish its 2019 budget over the next month, or at least pass a stop-gap bill to keep the government operating past Sept. 30. House Republicans m ay propose what they call Tax Reform 2.0 and lawmakers continue to mull what to do about technical corrections bill to fix mistakes in last year’s tax Cuts and Jobs Act.
The capital gains indexing reality show. Will the Trump Treasury unilaterally index capital gains for inflation? In an interview with Bloomberg last week, the president said, “I’m thinking about it very strongly.” Trump aides have been playing the will-he-or-won’t-he game for months. Many outside lawyers say that only Congress can change the tax treatment of investment profits in this way but Administration keeps teasing the issue.
Recalculating RMDs? While Treasury may not be able to index capital gains on its own, it can set rules for retirement plan distributions. Late Friday, President Trump asked Treasury to review the regulations that govern Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s. Current rules require people to begin taking (and paying tax on) distributions starting at age 70 ½. It is not clear what Treasury will do.
Arizona’s Supreme Court blocks a referendum on a state income tax for schools. The justices decided late last week to remove the education income tax measure from the November 6 ballot. The ruling has refocused voter attention on state candidates’ education plans. Since the Great Recession of 2007, Arizona has cut more than $1 billion from schools.
Will Oakland, California tax vacant properties to fund homelessness programs? Voters in November could approve a new tax on privately owned vacant properties. The city estimates that revenues could reach $10 million annually and fund homeless services, blight remediation, and new affordable housing.
The Trump Foundation wants New York’s self-dealing lawsuit dismissed. The nonprofit organization says that the lawsuit is politically motivated, and that “every penny” that the foundation raised supported “those most in need.” A spokesperson for New York’s Attorney General reaffirmed that the state’s lawsuit shows that the foundation “functioned as a personal piggy bank to serve Trump’s business and political interests.” Transactions include $100,000 paid to a charity to settle a dispute involving the Mar-a-Lago resort and $10,000 for portrait of now President Trump displayed at one of his golf clubs.
Tariffs, China and Canada… Bloomberg reports that President Trump wants to make good on his tariff threat on $200 billion in Chinese imports as soon as Thursday. Meanwhile, the US Independent Trade Commission has unanimously decided that imports of Canadian newsprint pose no material injury or threat to US industry. This reverses the US Commerce Department’s decision to impose tariffs on the product.
China finalized its tax cut plan. Reactions are ‘meh.’ The legislature approved a modest cut to individual taxes. A taxpayer can earn 5,000 yuan per month before paying tax, up from 3,500 yuan. This lowers the share of the urban labor force paying any income tax from 44 percent to 15 percent. The South China Morning Post reports that wage earners had hoped for even more tax relief: More than 100,000 people asked for bigger tax cuts during the public comment period.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
