A big tax speech. Last Wednesday, President Trump promised a tax plan that will benefit “loyal, hard-working Americans and their families” and lead America to “a big, beautiful comeback.” But as TPC’s Howard Gleckman notes, the President offered few details and seemed to put most of the onus of developing actual legislation on Congress.
Followed by confusion. In the days following Trump’s speech, Treasury Secretary Steven Mnuchin told The Wall Street Journal, “In no way are we just turning this over to Congress.” He said the White House and Hill GOP leaders would have a “very detailed plan” to present to Congress in September. But chief White House economic adviser Gary Cohn has a different story: He told CNBC on Friday that the Administration has only a "skeleton and framework” of a plan. The Big Six, made up of White House and Senate, and House GOP leaders, expects to meet with the President today. Tomorrow, he’s due to meet with the bipartisan leadership of Congress.
Followed by a public yawn. Hill Republicans wanted to spend August building public support for tax reform. But that effort fell apart in the wake of headlines over North Korea, Charlottesville, and Hurricane Harvey, as well as most real people’s focus on vacations. The result: An Aug. 24-28 Politico/Morning Consult poll found that the percentage of people who thought tax reform was a top priority fell from 42 percent in July to 38 percent in August.
What impact could “PAYGO” rules have on tax legislation? Pay-as-you-go rules block Congress from passing legislation that increases the deficit by cutting revenue or increasing entitlement spending. The Center for American Progress has a new issue brief that explains the rules and how proponents of reconciliation bills might subvert them.
So don’t be fooled. TPC’s Howard Gleckman warns of three gimmicks Congress may use to avoid the implications of its own rules for scoring tax bills: Temporary tax cuts; “revenue raisers” that raise no revenue; and budget tricks, like implausible economic growth assumptions or manipulating CBO’s fiscal baseline.
And beware of dangerous roads. Gleckman considers conclusions reached by the President and two academics. For different reasons, they think the tax code should include a political litmus test that would disadvantage those whose views conflict with or offend the majority. He explains why the line of argument is terrifying.
A loss for Treasury, and tax policy. Harry Grubert, an economist at Treasury’s Office of Tax Analysis for nearly 40 years, passed away on August 10. An expert in international tax, he was one of the architects of a foreign minimum tax.
Save September 27 for an event on income volatility, tax policy, and the social safety net. The panel will feature leading practitioners and policy experts who will examine how current policies affect the ability of families to predict and plan for tax obligations and windfalls. The conversation will include groundbreaking research from the recently released book The Financial Diaries: How American Families Cope in a World of Uncertainty. Aparna Mathur of the American Enterprise Institute, Tim Ogden of the Financial Access Initiative, Kate Griffin of Prosperity Now, and TPC’s Elaine Maag will serve on the panel moderated by Intuit’s David Williams.
The IRS urgently warns of another scam. There’s a new phishing scheme where cyber crooks impersonate the IRS and the FBI. The ransomware scam aims to take computer data hostage by enticing users to select a “here” link to download a fake FBI questionnaire. The link downloads malware that prevents users from accessing data stored on their device unless they pay money to the scammers. Don’t take the bait.
