What is a Republican Ways & Means member to do? The Wall Street Journal considers the plight of Representative Erik Paulsen. On paper, he’s done everything a congressperson should do, from raising funds to serving on a good committee, and helping write the Tax Cuts and Jobs Act. But he’s nonetheless the most endangered GOP member of the House Ways & Means Committee. The Minnesota lawmaker has embraced the TCJA but his Democratic opponent is running against it.
Taxing the Gig Economy: TPC conference on October 23. Thanks to the ubiquity of smartphones and associated technologies, there’s been growing interest in the “gig economy” through there is an ongoing debate about its size and effect on the overall economy. However many gig workers there are, this form of labor raises questions about tax filing and tax compliance for participants and tax administrators. The TPC conference will address what we know about the gig economy and how the tax system should adapt. Register here to attend the TPC conference on Tuesday, October 23 at the Brookings Institution, or register here to watch the webcast.
Speaking of online business: PayPal pays up in the United Kingdom. The UK subsidiary of the online payment service will pay an extra €3.1million ($3.57 million) in 2017 taxes following a review by the British revenue department. The BBC recently reported that this is a big jump from the $208,549 that PayPal paid in 2016. It has paid $5.42 million for 2017.
And Facebook’s UK tax bill also climbed, but to just 1 percent of sales. The social media giant paid £15.8m in UK tax last year despite record British sales of £1.3 billion. In 2017, Facebook increased its UK income by more than 50 percent but its pre-tax profits rose by only 6 percent to £62.7million. Facebook reduced its taxable profits in the UK thanks to £444 million in undefined “administrative expenses.” Worldwide, Facebook converted half of its sales to profits. But only 5 percent of UK sales became taxable profits.
As for those who may not want to “pay up.” Reuters reports that the Czech Republic has joined Ireland, Finland and Sweden in opposing the European Union’s proposed tax on large internet companies. In a joint paper, the countries warn that such measures may breach international treaty obligations.
While Congress prepares for the mid-term elections, the Daily Deduction will post Mondays until October 29, when it will return to its normal schedule.
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.
