Chairman Neal to Secretary Mnuchin: Debt limit update, please. House Ways & Means Committee Chair Richard Neal has asked Treasury Secretary Steven Mnuchin to provide an update on the debt limit before March 1. The current debt limit is suspended until that date but Neal and many Democrats fear President Trump would use it as a bargaining tool. Neal warns, “If the President chooses to engage in brinksmanship on the debt limit, as he did on the shutdown, the market reaction and the cost to our economy would likely be far larger than the 0.02 reduction in GDP that CBO attributed to the shutdown.”
Neal to extender advocates: Maybe. Neal also said yesterday he’s discussing the possibility of moving a bill to restore more than two dozen special interest tax provisions that expired at the end of 2017. If taxpayers are to benefit from them without having to file extensions, the so-called extenders would have to be revived before Tax Day.
Sen. Grassley to White House: Lift tariffs, then we’ll consider USMCA. The Senate Finance Committee chairman, in a joint statement with Iowa Secretary of Agriculture Mike Naig, says the White House should lift all tariffs on steel and aluminum imported from Mexico and Canada. They want it to happen before Congress considers legislation to implement the revised trade pact Trump calls the US-Canada-Mexico-Canada Agreement (USMCA). “Unfortunately, our producers are unlikely to realize the market access promises of USMCA while the Section 232 tariffs on steel and aluminum imports from Canada and Mexico remain,” write Grassley and Naig.
A tax on groceries? No sale, say Connecticut Republicans. To close expected state budget deficits of $1.5 billion next year and $2.3 billion the next, Democratic Governor Ned Lamont has floated a sales tax on groceries and medicine. The state’s 6.35 percent sales tax currently exempts those items, but could generate nearly $836 million if they are taxed. Alas, the state’s House Minority Leader calls Lamont’s idea a non-starter.
Colorado Senate Dems reject a tax rate cut. The legislature’s Senate Finance Committee defeated a bill that would have reduced individual and corporate income tax rates from 4.63 percent to 4.49 percent. The measure would have used the state’s windfall from the Tax Cuts and Jobs Act to cut taxes by $280 million in the fiscal year that begins July 1. But the bill’s opponents want to keep the money to fund education if the economy falters.
About that Wisconsin Foxconn plant: Never mind. Remember when former Wisconsin Governor Scott Walker promised $3 billion in tax subsidies in return for the display maker’s commitment to build a $10 billion plant and create up to 13,000 jobs over 15 years. Well, the Taiwanese firm has abandoned the plant. It now says it will hire white collar workers instead but offered no details.
This marijuana tax is too high. California lawmakers introduced a bill to temporarily reduce two taxes on newly legal recreational marijuana. The black market for pot has a competitive advantage, so the bill would cut the 15 percent cannabis excise tax to 11 percent and nix a cultivation tax on growers for three years.
Bring back the hotel tax, a watchdog group tells New Orleans. The city lifted its hotel tax in 1996 to give Louisiana room to collect tax revenue to build the Superdome. But now, the Bureau of Governmental Research says the city should revive the one-percent tax to fund drainage and street improvements and hire police officers. The tax could generate $12.3 million this year.
Two IRS hearings scheduled for next month. On February 13, the agency will hold a hearing on proposed regulations for a new tax on Global Intangible Low-Taxed Income, or GILTI. The IRS will hold a hearing on proposed Opportunity Zone regulations on February 14. It had been scheduled for January 10 but was delayed because of the partial government shutdown.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
