This morning on the Hill. The House Ways & Means Committee holds a hearing on “Growing Our Economy and Creating Jobs” at 10:00 am. It will focus on economic developments since enactment of the Tax Cuts and Jobs Act.
Amazon and Starbucks, not surprisingly, are unhappy with Seattle head tax. The city council OK’d a scaled down version of a tax on mid-sized and large firms on Monday. But leading businesses are not satisfied. A Starbucks senior vice president said, “If they cannot provide a warm meal and safe bed to a five year-old child, no one believes they will be able to make housing affordable or address opiate addiction.” Starbucks stores represent 3 percent of all of Seattle’s businesses. An Amazon vice president said “The city does not have a revenue problem — it has a spending efficiency problem.” The new tax, he added, “forces us to question our growth here.”
What's it like for a nonresident to pay taxes? TPC’s Aravind Boddupalli writes that the US government does not make paying taxes easy, especially for workers who are residents of other countries. “A nonresident is defined largely by what they are not,” he explains. The subsequent filing obstacles often result in nonresidents paying more tax than they owe.
Pennsylvania’s high court will decide the fate of Philadelphia’s soda tax. The Wall Street Journal reports (paywall) the American Beverage Association presented its challenge to the city’s 2017 tax on sugary drinks. The group argues that the city tax duplicates the state sales tax, thus taxing sugary drinks twice in violation of Pennsylvania’s Sterling Act that prevents cities from taxing items already taxed by the state. Philadelphia has prevailed in lower courts by claiming it is taxing wholesale distribution, not retail sales.
The Show Me State probably won’t be able to show taxpayers the money. A barebones plan to cut state taxes fell apart this week. State Senator Bill Eigel acknowledged that a tax rate cut would not happen this year. One reason: the personal legal troubles of GOP Governor Eric Greitens who pulled the measure from consideration. Missouri’s legislative session ends Friday at 6pm.
Washington DC’s city council doubles-down on a tax hike on ride-hail trips. Mayor Muriel Bowser proposed a tax hike to 4.75 percent but the city council would raise the gross receipts tax on Uber, Lyft, and Via from 1 percent to 6 percent. The tax hike would raise $18 million for the city’s contribution to the region’s troubled Metro transit system. The council also would require those companies to disclose information about their customers and trips.
The Senate will vote soon on a Balanced Budget Amendment. Sen. Rand Paul has been demanding a vote and it seems he will get one this week. Paul’s proposed constitutional amendment likely would require Congress to cut planned spending by trillions of dollars over the next decade. It is likely to fail.
In a race to cut taxes, China doesn’t seem to be running. The Chinese government promised to reduce the tax burden on companies and individuals, but tax revenues in the first quarter of this year have grown by 16.5 percent compared to the same period in 2017. Revenue has grown more than twice as fast as its economy: China reports its industrial output increased in the first quarter by 6.9 percent.
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.
