Shutdown drama escalates. The posturing, fighting, and brinksmanship over the federal spending bill continued over the Martin Luther King, Jr., holiday weekend. And it likely will continue until the end of the week when the latest temporary funding bill expires. President Trump declared “dead” a deal to prevent immediate deportation of children of undocumented immigrants—a key Democratic demand. Because many Republicans are likely to oppose a new funding bill, it needs Democratic support to pass. Despite President Trump’s recent remarks, congressional Democrats and Republicans continued to try to find their own compromise.
The Supreme Court will revisit Quill. The high court announced late last week that it will hear a challenge to its 1992 decision Quill Corp v. North Dakota. Quill blocked states from requiring out-of-state retailers such as online sellers from collecting sales tax. The Supreme Court will hear oral arguments in the new case, South Dakota vs. Wayfair, in April. Should the court overturn Quill, states could collect billions of dollars in additional tax from online sales. Only five states do not collect sales tax.
Will the GOP increase the IRS budget? Treasury Secretary Mnuchin says the Trump Administration is talking with Congress about increasing the agency’s budget to implement the Tax Cuts and Jobs Act. But House Ways & Means Committee member Mike Kelly of Pennsylvania says, “I think we’ll probably take a look into that, but I don’t know that they’re going to need more funding.”
The IRS private debt collection program: Three strikes? TPC’s Howard Gleckman reviews the latest. “According to a new report by the agency’s Taxpayer Advocate Service, the outcome is roughly the same as the last two episodes—the agency is spending far more on the program than the firms are collecting and remitting to the Treasury.” In addition, debt collectors mostly targeted lower-income taxpayers, some of whom receive Social Security Disability Insurance, which is supposed to exclude them from the program. “The evidence suggests it’s a much better deal for the debt collectors than for the rest of us.”
An income tax cut in Massachusetts…The state expects to collect $27.6 billion in tax revenue in the next fiscal year, or 3.5 percent more than this year. The main reason: Administration and Finance Secretary Michael Heffernan predicts modest growth in the state economy. Assuming the revenue estimates pan out, the state will lower its income tax from 5.1 percent to 5.05 percent on January 1, 2019. Massachusetts has been gradually lowering its income tax rate as it meets certain economic milestones.
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