Congressional leaders and the White House have reached a budget deal, but will the House support it? The agreement would boost military spending by $85 billion for the rest of this fiscal year and by another $85 billion next year, increase non-defense domestic spending by $63 billion this year and $68 billion next year, and add another $90 billion in disaster aid and $160 billion in additional war-related military and state department spending. However, Some House conservatives say they are opposed and Democratic Leader Nancy Pelosi still wants a commitment that the House will vote before March 5 on legislation to protect many immigrants from deportation.
Corporate buybacks double since the TCJA passed. Since the Tax Cuts and Jobs Act went into effect on January 1, 61 companies have announced $88.6 billion in stock buybacks compared to 58 companies purchasing $40.3 billion in the first five weeks of 2017.
A few more companies reward employees—and customers—post-TCJA. Chipotle is giving out one-time cash and stock bonuses to its qualified hourly and salaried restaurant workers, and plans to offer additional paid parental leave coverage for many employees. Duke Energy Kentucky may reduce or eliminate entirely its first rate hike in over a decade, thanks to the TCJA’s corporate tax cuts.
But will the TCJA grow US businesses? After the bonus buzz fades, what will companies do with the extra money they get from both corporate tax rate cuts and immediate deduction of the cost of equipment acquired before 2023? Will they make more capital investments in the US to boost productivity, and eventually, workers’ wages? The Tax Hound shares five reasons why they may not.
Ron Wyden wants to know too. The top Democrat on the Senate Finance Committee has asked the Government Accountability Office to study how the TCJA’s corporate tax changes will affect wages, jobs, and investment.
The business landscape is changing in far more ways thanks to the TCJA. TPC explores how on February 13. TPC will convene economists, practitioners, and other experts to examine the business provisions of the new tax law. The morning event at the Brookings Institution will include panels to examine the implications for pass-through and multinational businesses. Panelists include Lilian Faulhaber of Georgetown Law, Brian Reardon of the S Corporation Association, Rosanne Altshuler of Rutgers University, Pam Olson of PricewaterhouseCoopers, and Richard Rubin of The Wall Street Journal. The event will be webcast, or you can register to attend in person.
The TCJA may change the nature of entrepreneurship and philanthropy, too. The tax code affects entrepreneurial activity and can encourage or stifle an entrepreneur’s philanthropic giving. At a TPC morning forum on March 7, experts will discuss new research that examines how estate and inheritance taxes affect entrepreneurship and how income and estate taxes affect the very wealthy.
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.
