Two weeks for more countries’ pleas for tariff exemption. Treasury Secretary Mnuchin told CNBC that President Trump may consider other countries for tariff exemption. Perhaps count among them members of the European Union. EU Trade Commissioner Cecilia Malmstrom will meet with US Trade Representative Robert E. Lighthizer tomorrow in Brussels; she’ll ask how the EU can apply for an exemption. Also in line, maybe: South Korea. CNN reports that South Korea asked for an exemption on the new steel tariff, and the request will be “proactively consider[ed].”
Don’t forget the “reciprocal tax.” President Trump says he plans to proceed with a reciprocal tax on imports saying that if China imposes a 25 percent duty on products US imports, the US should institute a 25 percent tax on Chinese imports.
Fixing the Tax Cuts and Jobs Act is necessary, but won’t be easy. The New York Times reviews the necessary alterations and corrections to the TCJA resulting from its rapid development and enactment. Some lobbyists are already out in force for their interest groups, and there may be more to come. Former Treasury Department official Dana Trier notes that “The mistakes or unintended consequences for this or that group won’t show up for months.” And unlike the TCJA, passed in both chambers under budget reconciliation with party-line votes, legislative fixes will require some Democrats in the Senate to join Republicans.
TCJA cuts are affecting affordable housing development in California. The corporate tax rate cut enacted under the Tax Cuts and Jobs Act has reduced the value of a tax credit available to developers who offer homes at affordable rents for lower-income Americans. Resulting budget gaps are delaying development projects and reduce the supply of affordable housing in California. Nearly all below-market rental properties use the tax credit program, which prior to the TCJA covered 20 percent to 70 percent of development costs.
State budget fiscal controls require some finesse. TPC’s Kim Rueben reviews Connecticut’s effort to stabilize and improve the state’s financial future. The controls include changes to a spending cap and a new bonding cap and revenue volatility cap. But, Rueben explains, “if Connecticut implements strict budget rules without exceptions for recessions and other unanticipated events they could create a new form of state fiscal risk.”
The EU’s tax haven blacklist gets longer. The European Union will add the Bahamas, the US Virgin Islands and Saint Kitts and Nevis to its list, joining American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago. The 28 EU governments will remove Bahrain, the Marshall Islands and Saint Lucia from its tax haven blacklist.
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