The State of New York sues the Donald J. Trump Foundation. The state’s attorney general accused the charity and the Trump family of violating campaign finance laws, self-dealing, and illegal coordination with Trump’s presidential campaign. The state attorney general has also sent referral letters to the Internal Revenue Service and Federal Election Commission for possible further action. New York State wants to dissolve the foundation, collect $2.8 million in restitution, and impose several million dollars in penalties on the foundation and its directors. The state also seeks to bar the president from serving as a director, officer, or trustee of another nonprofit for 10 years.
States seek revenue in new and unusual ways. Why? TPC’s Howard Gleckman reviews the rise of unconventional state and local taxes, like head taxes, parcel taxes, sugar taxes, marijuana taxes, developer taxes, tourist taxes, and sports betting taxes. What are they, and what accounts for them? Why are they so popular? In a nutshell, “Cities and states need revenue to pay for services their residents want. But if voters won’t support traditional income, property, or sales taxes, don’t be surprised when elected officials find new taxes to pay the bills.”
Gary Cohn analyzes the TCJA. Former top White House economic adviser Gary Cohn told The Washington Post that that Tax Cuts and Jobs Act won’t pay for itself, despite Administration claims to the contrary. He also told The Post that he worries that a trade war could offset any of the tax cuts benefits.
TPC analyzes the TCJA, too. In a new paper, TPC researchers examine the corporate and individual income tax changes in the Tax Cuts and Jobs Act. The authors conclude that while the TCJA will stimulate the economy in the near term, the long-term impact on GDP is likely to be small. The TCJA will make the distribution of after-tax income more unequal, raise federal debt, and impose burdens on future generations. When it is ultimately financed with spending cuts or other tax increases, as it must be in the long run, TCJA will likely make most households worse off.
House Appropriations Committee approves IRS funding increase. The $23.4 billion financial services spending bill includes an increase of $186 million in IRS funding, bringing the agency’s budget to $11.6 billion. The bill includes an additional $77 million on top of $320 million authorized for TCJA implementation in March. Riders to the bill would largely prevent the IRS from using funds to enforce the law that bars churches from endorsing political candidates.
President Trump may introduce tariffs on specific Chinese goods today. Or maybe next week. He met with his trade advisors this week about revisions to his initial tariff list targeting $50 billion of Chinese goods. Will he activate the tariffs today? Reuters reports that it is unclear.
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.
