“First you spread your limbo feet.” TPC’s Howard Gleckman explains how President Trump’s budget proposal hangs together without falling over. Hint: It involves a “hypothetical kitchen device, a big dose of supply side economics, and a black box the size of an aircraft hanger.” Seems… precarious.
“Then you move to the limbo beat.” Is Mnuchin walking back the Mnuchin rule? In his confirmation hearings, he pledged that Trump would not cut taxes for high-income households. But at a policy conference today, the Treasury Secretary said that will now depend on negotiations with Congress: "I can't pledge what the results will be since the results are going to be a combined effort of the administration, the House and the Senate." He also acknowledged what most everyone has known for months—Congress won’t pass a tax bill by August.
“Bend back like a limbo tree.” The Wall Street Journal reports on (paywall) yesterday’s House Ways & Means hearing on the BAT. Target CEO Brian Cornell says a BAT would nearly double Target’s tax rate to 75 percent. But Juan Luciano, the CEO of grain giant Archer Daniels Midland, says a BAT would help American farmers. Treasury Secretary Steven Mnuchin said at a different event, “It has very different impacts on different companies, it has the potential to pass on significant costs to the consumer, it has the potential of moving the currencies.” Given the discord, the proposal remain in limbo. Check out TPC’s podcast to understand its ins and outs.
“All around the limbo clock” in Kansas. Kansas House members rejected a $1.2 billion tax plan that would have rolled back most of GOP Governor Sam Brownback’s 2012 tax cuts. Those cuts resulted in two tax rates: For single taxpayers, they are 2.7 percent on the first $15,000 of taxable income and 4.6 percent on taxable income over $15,000. Under the proposal, state personal income tax rates would have been set at 3.1 percent, 5.25 percent, and 5.7 percent. The top bracket would apply to single taxpayers earning more than $30,000 (more than $60,000 for married people).The plan would have also repealed a business income tax exemption. It’s back to the drawing board for lawmakers now, with a June 17 budget deadline approaching fast.
“Jack be limbo Jack be quick” in Wisconsin. A Wisconsin Republican state representative wants to tax cigars that look like cigarettes, or “little cigars,” just like cigarettes. Little cigars are currently taxed at 78 cents per pack, while cigarettes are currently taxed at $2.52 per pack. Raising the tax rate on little cigars to that of the cigarette would raise an additional $450,000 in annual revenue, all of which would fund property tax relief.
“How low can you go” in Indiana? An Indianapolis man facing charges of felony tax evasion for fraudulently using tax credits sued the state. He argued, using a clause in Indiana’s 2015 Religious Freedom Restoration Act, that paying state taxes posed a burden on his religion. The Indiana high court upheld a lower appellate court’s decision: The man has to pay even if he chooses to pray.
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