The TCJA: Not ideal reform; no boon for the economy. TPC’s Ben Page recaps the May 23 event cosponsored by TPC and Northwestern’s Kellogg School of Management. Participants broadly agreed that the 2017 tax law falls short of ideal reform because it increased the federal debt and is likely to have little or no long-run economic benefit. On the bright side: The revenue shortfall and the scheduled expiration of many provisions in the Tax Cuts and Jobs Act will require future amendments to the tax code, giving Congress the chance to make improvements.
Trade Woes, New Foes? The tariffs President Trump announced Friday that will largely fall on US allies including Canada and Europe. The targeted nations already have responded with protectionist tariffs of their own and the move puts NAFTA negotiations on thin ice. Meanwhile, US trade talks with China have stalled over threatened US tariffs. TPC’s Howard Gleckman finds that tariffs coupled with the President’s immigration controls would slow the economy, eliminating any benefits of the Tax Cuts and Jobs Act.
Tax Policy, meet Partisanship. TPC’s Howard Gleckman notes that the politics driving many tax proposals create policies that are almost caricatures of themselves: Many Republicans want to shift the tax burden to lower-income people, while many Democrats want higher-income households and larger businesses to pay more. In all, “they fail a key test of a healthy civil society: If we believe government ought to provide certain services or other benefits, everyone ought to help pay for them, not just the ‘other guy.’”
In the Philippines, Duterte says “Let Congress fix it.” The nation’s president fought for a tax increase that is now being blamed for inflation. The law imposed excise taxes on oil products, raised levies on sugary drinks and automobiles, and cut personal income taxes. New revenues would fund a $160 billion infrastructure program. President Rodrigo Duterte lays responsibility at Congress’ feet. “The law was enacted by Congress, I leave it to Congress to decide whether or not to amend, suspend or modify the law.”
Down Under, Amazon reacts to Australian tax law by reducing shopping choices. Starting July 1, online retailers must pay a 10 percent consumption tax on goods purchased from overseas sites and shipped to Australia. The tax currently applies only to purchases of AU$1,000 ($757) or more. In response, Amazon will block Australians from buying from its international e-commerce sites and restrict them to a smaller, Australia-specific platform.
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.
