US banks are happy about the TCJA. The New York Times reviews how the new tax law helps the country’s banks. The financial institutions benefit from a lower corporate rate and more preferable tax treatment for pass-through companies, which includes many small banks. “It remains to be seen,” notes the Times, “whether the tax cuts’ benefits create lasting benefits for workers.”
United Health Group wins big, too. The nation’s largest insurer reports an expected 2018 earnings gain of $1.7 billion thanks to the Tax Cuts and Jobs Act’s corporate tax rate cut. CEO Dave Wichmann says the company will invest the additional earnings in new technology and community-based healthcare initiatives. He did not mention using any of the earnings to raise employee wages.
But a handful of firms may pay most of the repatriation tax. The Wall Street Journal published (paywall) an analysis by Zion Reseach Group of which industries and firms would pay the TCJA’s tax on un-repatriated foreign earnings. It estimated that just five companies—Apple, Microsoft, Pfizer, GE, and IBM—have generated $633 billion of the $2.8 trillion in un-repatriated earnings and could collectively owe more than $70 billion in tax. Apple, with $252 billion in foreign profits, is by far the largest.
The TCJA worries a Chinese credit rating firm. Chinese credit agency Dagong Global Credit Rating lowers the US rating from an A- to a BBB+. It has also given the rating a negative outlook. The agency cites the United States’ increased reliance on debt resulting from the TCJA.
New York Governor Andrew Cuomo moves ahead with a new state payroll tax. He’s recommending that the state switch from a now partially deductible individual income tax to an employer payroll tax that will be fully deductible for federal income tax purposes. The governor also wants to create new state charitable funds for education and health care. New Yorkers would donate to the charities and get tax credits. He also recommends deferring tax credits for companies that receive $2 million or more in credits for one year, which would raise $300 million in state revenue, The moves are part of a restructuring plan that Cuomo says will reduce the negative impact of the TCJA.
Texas Governor Greg Abbott would limit property taxes. He proposes a cap on property tax revenue increases to 2.5 percent per year. This revenue cap would apply to the taxing authority of cities, counties and schools and hospital districts. Governor Abbott says he wants to keep property tax increases from outpacing income growth.
Colorado lawmakers will debate a tax on plastic bags. State lawmakers will debate the merits of a state-wide tax of 25 cents on the use of plastic grocery bags. The tax would apply to all plastic bags and revenue would fund affordable housing. Across the country, Americans use an estimated 100 billion plastic bags a year. California as well as a dozen cities, including the District of Columbia, have bans or taxes on the bags.
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