Will Treasury rules to curb offshore tax deals slow economic growth? A group of GOP Senators told Treasury Secretary Jack Lew they would: “Far from the stated intent of addressing abusive tax transactions, we are concerned that the actual effect of these regulations will be to drive investment and capital outside of America’s borders, further eroding the U.S. tax base,” wrote senators Dean Heller, Pat Roberts, John Thune, Tim Scott, Mike Crapo, John Cornyn, and Johnny Isakson.
The Tax Foundation analyzed the Ryan tax plan. The group concludes the plan could boost the economy over the “long run” by more than 9 percent, increase wages by nearly 8 percent, and add 2 million jobs. Over the next decade, government revenues would fall by $2.4 trillion on a static basis but only by $191 billion according to the group’s dynamic score, which incorporates its estimate of substantial economic growth.
Oil prices remain low, and energy-dependent states are reeling. The states face revenue shortfalls thanks to the low price of oil and gas. Prices have been low for the past two years, and revenue shortages leave some states worried about paying for schools, infrastructure, healthcare, and higher education.
Puerto Rico: Resuscitated, but not yet revived. Last week, President Obama signed into law the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). Says TPC’s Tracy Gordon: “PROMESA threaded the needle of providing an orderly restructuring process and credible, external oversight while keeping enough members of Congress on board. Now, for the sake of the 3.5 million Americans living in Puerto Rico, let the real work begin.”
Some Indian landowners buy farms as a tax dodge. Bloomberg reports that thousands of wealthy landowners in India avoid taxes by taking advantage of laws aimed at helping hundreds of millions of poor farmers. Some buy agricultural land so they can characterize their income as returns from farming. In 2011, taxpayers reported $29 trillion in “agricultural income”--15 times the size of India’s entire economy.
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