Continuing to sow doubt about Tax Cuts 2.0. House Ways & Means Chairman Kevin Brady told CNBC that he doesn’t think Congress can pass the latest package of GOP tax bills before the November mid-terms, even though the package was designed to put pressure on Democrats up for reelection. If the GOP keeps its majority, he says the Senate will consider each of the three bills making up Tax Cuts 2.0 individually.
Meanwhile, SALT spices up congressional election prospects in high-tax states. The Associated Press takes a closer look at the House races Democrats hope to win in New Jersey, New York and California. Those districts are home to voters who are quite upset about the Tax Cuts and Jobs Act’s $10,000 cap on state and local tax deductions, and Democrats are making the most of it.
What does the TCJA’s full expensing provision mean for communities? The TCJA allows businesses to immediately deduct the full cost of their capital investments, but will begin to phase out in 2022 and end in 2026. To take advantage of the tax break, firms will likely accelerate their investment in technologies that could either augment or replace labor—in other words, more jobs, or robots. Donnie Charleston of TPC’s State and Local Finance Initiative makes the case in Governing that “now is the time for state and local leaders to be having real conversations with industry heads and asking probing questions about their short- and long-term investment plans.”
What’s the impact of Philadelphia’s soda tax on soda consumption? About one year in, the tax has not substantially reduced children’s consumption of sweetened beverages overall, according to new research in a National Bureau of Economic Research working paper. Authors do find, however, that the tax has reduced the intake of added sugars from beverages for African American children and children who were the highest consumers of added sugars before the tax. Adults reduced their consumption of regular soda but not of sweetened beverages overall.
McDonald’s got a break yesterday. The European Commission has determined that McDonald’s did not receive illegal state aid through its tax deal with Luxembourg. While the profits the EU were investigating were not taxed in either the US or Luxembourg, it wasn’t because Luxembourg or McDonald’s broke any rules. Rather, the commission concluded, there was just a mismatch between countries’ tax laws. Luxembourg’s government is taking steps to prevent similar situations in the future.
Tune in today at 12:30. TPC hosts an event to explore the costs and benefits of tax regulations in light of Treasury's and OMB’s new responsibilities. You can see the agenda here, and you can view the live webcast here.
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.
