The US is on track to spend more on debt than defense. The Wall Street Journal delves into (paywall) rising interest rates and inflation trends and concludes Treasury will likely need to issue twice as much debt in 2018 as 2017 because of growing deficits. The red ink is flowing because of… that’s right: The 2017 Tax Cuts and Jobs Act and the bipartisan spending bill enacted this past spring.
Did the TCJA help flip suburban districts? The law’s cap on state and local tax (SALT) deductions may have turned off Republicans voters in the once-GOP districts. Among the 25 congressional districts home to the most taxpayers who take SALT deduction, the GOP controlled nine. Six flipped blue last week, and votes in some are still being counted.
Waiting for post-TCJA interest deduction rules. Tax Notes reports that Treasury's deputy assistant secretary for international tax affairs Chip Harter told a tax law conference to expect about 500 pages of interest deduction rules this week. The TCJA relied on higher taxes from interest deduction limits to reduce the net revenue loss of its corporate tax cuts.
With more Democrats in control, what will happen to state fiscal agendas? They didn’t get as much attention as elections at the federal level, but the results will realign some state capitols. TPC’s Kim Rueben writes that “if history is a guide, the switch from Republican control to divided government or even Democratic control could change the way states respond to budget shortfalls. But not necessarily in the way you think.”
Nebraska Governor Pete Ricketts has a tax plan for agricultural land. The Republican wants to ease the tax burden on farmers by changing the way Nebraska appraises agricultural land. Rather than using a market-based system, Ricketts proposes doing what other Midwestern states do. Iowa, Illinois, Indiana, Kansas, Ohio, Wisconsin, and the Dakotas all levy property taxes based on the potential income the property can generate. They all tend to charge less in agricultural property taxes than Nebraska.
How will Missouri solve its transportation budget problems? In spite of bipartisan support among state lawmakers, voters easily rejected a 10-cent-per-gallon gasoline tax increase last week. With only 46 percent of voters backing the measure, the Show Me State may be looking at increases in license and registration fees.
Watch out, Kansans, and everybody else… The Wichita County Tax Office reports two incidents where citizens received email that appeared to come from an authentic Wichita County government address. “With tax statements being mailed just recently, we did not want any of our citizens to fall prey from an email that appears, on the surface, to be sent from a legitimate county email address,” said an office spokesperson. The IRS has been issuing warnings about criminals attempting to do the same thing with IRS correspondence. Taxpayers, beware.
Is an EU digital tax deal on deck in December? Germany’s Finance Minister Olaf Scholz wants to close a binding deal on a digital tax at the EU’s next meeting of finance ministers next month. He supports the French model where EU states would impose minimum corporate tax rates and effective taxation of digital companies starting in 2021 if they fail to reach an international agreement on tax avoidance. "We are in principle in agreement with our French friends on such a two-step strategy," Scholz said.
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