A new poll shows an uptick in support of the tax bill. A Monmouth University poll finds that 44 percent of those surveyed approve of the Tax Cuts and Jobs Act, while an equal number disapproves. About one-third believe the TCJA will raise their taxes. Back in December, the same poll found only 26 percent approved, while 47 disapproved. The survey was taken January 28-30, mostly before the President’s Tuesday night State of the Union address.
Debt limit drama. With all the focus on the seemingly endless temporary government funding bills—the next one runs out next week—don’t forget about the debt limit. The government will run out of borrowing authority soon, setting up yet another crisis. CBO estimates that, without congressional action, the government will have to stop paying some bills “in the first half of March” several weeks sooner than it previously projected. The main reason: Lower withholding due to the TCJA. Treasury Secretary Steven Mnuchin has said the debt limit would be hit in late February.
California’s Senate passes a TCJA work-around. The bill would allow residents to pay state taxes through a federally tax deductible state-run charity. The goal: Help taxpayers affected by the $10,000 cap on the federal state and local tax deduction. The California Assembly still must consider a companion bill. Democratic Governor Jerry Brown is open to the idea, but is not certain it will pass muster with the Internal Revenue Service.
Unsurprising TCJA beneficiary? ADP. Automatic Data Processing, the payroll and tax services provider, expects to benefit from the new tax law. It forecasts revenue growth of 7 percent to 8 percent in fiscal year 2018, up from an earlier forecast of 6 percent to 8 percent. ADP will not only pay lower taxes in 2018, but it’s likely to do more business with client firms that must change their tax accounting thanks to the TCJA.
Anthem joins the TCJA chorus of praise. The subsidiary of health insurer Blue Cross Blue Shield raised its 2018 revenue projections. The suspension of the health insurance tax and lower claims contributed to the rosier picture.
Boeing’s profit takes off with the TCJA. Timing is everything, apparently. The aerospace manufacturer’s carbon-fiber 787 Dreamliner is now profitable, just in time for the TCJA’s reduced corporate tax rate. The company expects to pay a 16 percent effective tax rate this year.
Speaking of businesses: TPC event on the TCJA and changing business landscape. 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 multinationals 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.
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.
