There’s a baseline, and there’s precedent (or a lack thereof). Fivethirtyeight.com explains how hard it is to find consensus on exactly how much presidential candidates’ tax proposals would cost. “[T]he Tax Policy Center …probably the closest thing out there to a neutral observer… doesn’t produce dynamic estimates. But its well-regarded static estimates can still be a useful baseline.” History remains a trusted guide, too. TPC’s Len Burman shows how the GOP field’s proposed cuts would be the biggest. It’s a whole new tax-cut world out there.
In DC this week… On Tuesday, OMB Director Shaun Donovan will testify on the President’s budget before the House Appropriations subcommittee on Financial Services and General Government. Wednesday features a House Ways & Means hearing on international tax reform. Thursday’s the day for TPC’s forum on tax policy in 2016.
Hungry for a “double Irish, Dutch sandwich?” Google was. In 2014, Google moved $12 billion through the Netherlands to a Bermuda-based Irish affiliate, allowing it to avoid taxes on most of its foreign income. The structure, revealed in recent disclosures by Google Netherlands Holdings BV, results in an effective tax rate of 6 percent for Alphabet, Inc., or Google.
Ending an accidental tax break could help Michigan lawmakers pay for Detroit schools. Car insurers enjoy an $80 million unintentional tax break and the carriers and the state’s GOP legislature are fighting over what to do about it. Lawmakers want to fix the mess, which stems from the state’s program for uninsured motorists. Somehow private insurers got a tax credit for drivers who are insured through the Michigan Automobile Insurance Placement Facility. The insurers insist they’ll pass on any tax increase to drivers. Lawmakers wonder why the insurers didn’t cut premiums when they got the credit. If the state can’t get the money, it will use some of the $250 million the state gets each year from its 1988 settlement with tobacco manufacturers to help Motown schools. Much of that money now goes to Medicaid and economic development. Don’t ask.
In Florida—compromise on tax cuts? GOP Governor Rick Scott continues to insist his proposed tax cuts would boost the state’s economy, but Republican legislative leaders want room for negotiation. The state’s Revenue Estimating Conference lowered its annual forecast by $390 million last month, and lawmakers don’t want to be left holding the bag. “Everybody is going to have to give a little,” said Senate President Andy Gardiner.
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