New Jersey moves ahead on a SALT workaround. Last month, Treasury moved to block states from turning state and local tax payments, which the Tax Cuts and Jobs Act made only partially deductible against federal income taxes, into fully-deductible charitable gifts. New Jersey’s Democratic governor Phil Murphy is moving ahead anyway. What will happen if Treasury finalizes its rules barring the practice? “We’ll see them in court,” says the state’s attorney general.
Donor disclosure requirements: Two senators try to maintain them. Democrats John Tester (MT) and Ron Wyden (OR) introduced a resolution this week to overturn the IRS guidance that reduces donor disclosure requirements for certain tax-exempt organizations. The July guidance exempts groups such as social welfare organizations from disclosing to the IRS the names and addresses of significant donors. The Democrats argue that the exemption will lead to more secrecy around “dark money” and make it easier of foreign governments to interfere in US elections.
The check isn’t in the mail. The Wall Street Journal reports that multinational corporations are not receiving refunds on their 2017 tax returns. The companies say the IRS is incorrectly applying the refunds to future installments of the TCJA’s one-time tax on past foreign profits. The 2017 law gives the companies eight interest-free years to pay that one-time tax, so the companies insist the IRS should not be applying 2017 refunds toward those bills.
What is a tariff, and who pays it? TPC’s Howard Gleckman offers a primer on the tax on imported goods, answering these two questions as well as describing the theory that explains economic responses to tariffs. He also answers whether new tariffs will generate a big boost in federal revenue, as the President claims. Short answer: No.
How do you measure a city’s fiscal health? TPC’s Tracy Gordon looks at new ways to do it, especially given low-probability, but highly consequential, risks such as bankruptcy and default. One approach: Look at how cities weathered housing price shocks of the Great Recession. Her paper was originally published by the Lincoln Institute of Land Policy.
Making an opportunity out of Opportunity Zones. The TCJA created extremely generous tax benefits for investors in designated Opportunity Zones. Now at least one investor is looking to take advantage of the opportunity. Bloomberg reports that the Arlington, VA-based hedge fund EJF Capital is looking to raise about $500 million to invest in the zones.
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.
