Budget progress? House passes a stop-gap spending bill and Senate Appropriations approves three money bills. The House easily approved a temporary spending bill to keep the government running until just before Thanksgiving. The Senate appropriations panel approved $74.3 billion for the departments of Transportation and Housing and Urban Development, $151.7 billion for agriculture, and $24.2 billion for financial services and general government. Other bills remain stalled.
Would confiscatory taxes bring Pharma to the negotiating table? House Speaker Nancy Pelosi has proposed linking prices for some costly US drugs to an average price paid in other countries. Manufacturers that refuse to negotiate those prices would be subject to an excise tax starting at 65 percent of sales, rising to 95 percent. As many as 250 drugs could be subject to the reference price model—or the tax.
Another subpoena, another lawsuit. President Trump is suing to block a subpoena by Manhattan District Attorney Cyrus Vance for the president’s tax returns. Vance subpoenaed eight years of Trump’s personal and corporate tax returns from his tax preparer, Mazars USA, in an investigation of hush money payments made to two women who allege affairs with Trump. Trump’s attorney, Jay Sekulow, says the investigation is unconstitutional.
OECD’s Interim Economic Outlook: Worldwide growth will remain slow. The Organization for Economic and Cooperative Development’s chief economist says, “The global economy is facing increasingly serious headwinds and slow growth is becoming worryingly entrenched.” The OECD projects global growth will slow from last year’s 3.6 percent to 2.9 percent in 2019 and 3 percent in 2020, largely because of trade tensions.
Speaking of trade… US Steel’s stock price continues to fall in the wake of tariffs on foreign steel. Over the past year, the manufacturer’s stock price has fallen over 60 percent. The company reduced its European work force by 1,800 and plans to cut another 2,500 by the end of 2021.
A new Form 1040 for seniors. The IRS published a draft Form 1040-SR last week. It has larger print, removes shading around boxes, and has lines for specific retirement income streams like Social Security benefits, IRA distributions, and pensions and annuities. "Approximately 10 percent, or 15 million, taxpayers might qualify for the 1040-SR," said founder of Retirement Income Strategies, Kristian Finfrock. Seniors who itemize deductions or own their own businesses will not be able to use the new form.
On Tuesday at TPC: Taxing Wealth. Elizabeth Warren proposed a wealth tax and Bernie Sanders suggests it could help pay for Medicare for All. The levy has the potential to reduce inequality, fund assistance to low-income families, or reduce the deficit. But it has largely failed in Europe. Can it work in the United States? Social impact investor Ian Simmons, who backs higher taxes on the wealthy, will be joined by a panel of tax experts to discuss the levy. Register here for the TPC event. The event will be webcast live here, beginning at 9:00 am on Tuesday, September 24.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
