More on the President-elect’s plan for tax cuts. Donald Trump told The Washington Post that “we’re getting very close” to legislation that will change tax rates. They’ll “probably be 15 to 20 percent for corporations. For individuals, probably lower. Great middle-class tax cuts.” He did not say how this promise fits with his most recent tax plan, where many middle-income households would pay a 25 percent rate. Trump also promised “insurance for everybody” from his health care plan that is awaiting “final strokes.”
There’d be huge tax cuts for a few if the Affordable Care Act is repealed. The Center on Budget and Policy Priorities calculates that the 400 highest income households would get big Medicare tax cuts if Congress kills two ACA taxes, which apply only to individuals with income of $200,000+ ($250,000 for couples). Eliminating the ACA’s Hospital Insurance surtax and its Medicare tax on unearned income would save the Top 400 $2.8 billion annually or an average of $7 million per household.
Mnuchin will appear on Thursday before the Senate Finance Committee. The panel has set a confirmation hearing for Steven Mnuchin, Trump’s nominee to be Treasury Secretary. Mnuchin, a former senior official at Goldman Sachs, has recently run his own private equity firm and produced Hollywood movies. Democrats are likely to focus on his role as president of OneWest Bank from 2009-2015.
Trump targets another automaker. He warned the German newspaper Bild that BMW would face a 35 percent tax on any automobiles it makes in Mexico and sells in the US. Starting in 2019, BMW plans to manufacture 3 Series cars for the global market in a Mexican plant. The facility would supplement production in Germany and China.
What would Governor Le Page’s tax cuts mean? The 16,000 Mainers who earn over $200,000 a year would no longer face a 3 percent surtax if the Republican governor gets his way. His proposed 5.75 percent flat tax would reduce taxes by about $70 for someone making $28,000 a year. A person bringing home $128,000 would save $1,340.
Mississippi Budget Blues… Taxes aren’t generating enough revenue to fund the state’s $6.4 billion budget. Bills passed from 2012 to 2015 could cut state tax revenue by as much as $287 million in the current fiscal year. Moreover, a 2016 measure to phase out the corporate franchise tax and cut income taxes will reduce revenues by $415 million over 12 years. The state’s population has fallen in each of the past two years, too. To fill the budget gap, Governor Phil Bryant has cut spending by about $100 million—or barely 2 percent.
Will the United Kindom become a tax haven? The UK’s finance minister Philip Hammond says Great Britain could become exactly that if the European Union does not give it a satisfactory market access agreement after Brexit. “We could be forced to change our economic model… to regain competitiveness. And you can be sure we will do whatever we have to do.” The problem: Big fiscal deficits will make it tough to cut taxes.
Will the UK sugar tax lose its bite? A new European Union effort to nix sugar manufacturing quotas could flood the market with cheaper sugar. Prices could drop by as much as 15 percent, which could dilute the impact of Britain’s newly adopted tax on companies selling sugary drinks.
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