The government may not shut down. After of weeks of threatening to shut down the government if Congress doesn’t fund his border wall, President Trump now says—through a spokeswoman--that he wants to avoid a closure and will find $5 billion for a wall from sources other than the pending spending bills. There are no other sources. Without a specific appropriation, the executive branch cannot spend billions of dollars on a project. Meanwhile, congressional leaders still must agree on the details of a funding bill to keep the government running after Friday. The latest sticking point: Republicans want to shift a billion dollars in unspent money to border security and Democrats don’t.
But the Trump Foundation will. Under fire for using foundation money for political and business purposes, Trump has agreed to shut down his tax-exempt foundation. However, New York Attorney General Barbara Underwood will continue to pursue its lawsuit against the charity, the President, and his three oldest children. Underwood said yesterday that the state’s investigation has uncovered “a shocking pattern of illegality… including unlawful coordination with the Trump presidential campaign, repeated and willful self-dealing, and much more.”
Will House Democrats succeed in their quest to see the President’s tax returns? The Washington Post looks at the new majority’s investigative priorities, and those tax returns are high on the list. The Democrats on the House Ways & Means Committee plan to formally request the returns from the Treasury Secretary in the 116th Congress. “The chairman has the right to ask for those returns and the president may feel that there’s no law which forces him to do that, and then we’ll see,” said Rep. Bill Pascrell, Jr., concluding, “we’ll go to the courts.”
States raised $1 trillion in tax revenue last fiscal year, but is it brightest before the dark? TPC’s Lucy Dadayan writes about a big bump in state revenues in the TPC State and Local Finance Initiative’s latest State Tax and Economic Review quarterly report. “States closed their fiscal 2018 books at the end of June on a positive note. But they shouldn’t bank on the good times lasting forever.” States collected slightly over $1 trillion in tax revenues in fiscal year 2018, a gain of 7.8 percent over 2017. But much of the growth came from double-digit increase in individual income tax revenue that may largely be a result of taxpayers accelerating tax payments in response to the debate and eventual congressional approval of the Tax Cuts and Jobs Act.
TPC Enhances Its Tax Expenditure Modeling. The Tax Policy Center is improving its modeling of five key tax expenditures: the tax treatment of pass-through entities, charitable giving, health insurance, retirement, and owner-occupied housing. Partially in response to many changes in the Tax Cuts and Jobs Act (TCJA), and with the support of the Peter G. Peterson Foundation, TPC hopes to more accurately analyze how future changes in each of these tax preferences would affect households and federal revenues.
The price of victory? They not only won the World Series, but the Boston Red Sox have Major League Baseball’s top payroll, one that is well in excess of league limits. So, the team owes $11,951,091 in luxury tax. The only other major league team that owes that tax: The Washington Nationals, who have a bill of $2,386,097 and failed to even make the playoffs in 2018.
In Oakland, California, a tax moves ahead. The Oakland City Council certified Measure AA, which will impose a tax to fund early childhood education and college readiness programs for Oakland students. The ballot initiative did not receive two-thirds of the city’s vote in November, but the San Francisco city attorney interprets a recent California Supreme Court decision to mean that citizen-initiated tax measures need only a simple majority to pass. Opponents of the tax, which would be $198 annually for owners of single-family homes and $135 for multiunit residences, vow to sue.
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.
