Thank “People are talking…” President Trump is “open to talking about” revising the TCJA’s cap on SALT. The Tax Cuts and Jobs Act limits state and local tax deductions to $10,000 on federal income tax returns. Trump told reporters yesterday that “There are some people from New York who have been speaking to me about doing something about that, about changing things,” but, he noted, the cap “makes all states the same.” However, Politico reports that Senate Finance Committee Chair Chuck Grassley has no interest in amending the SALT cap.
“Talkin’ ‘bout people.” The TCJA is indeed creating jobs. But they’re in the tax industry, reports The Wall Street Journal (paywall). US accounting firms now employ more than one million people. That reflects 3.6 percent growth in the TCJA’s first year. “Business is unusually strong and should remain robust for years as a result of the law,” reports the Journal.
“I hear them whisper…” Speaker Nancy Pelosi told reporters yesterday that Americans “overwhelmingly” support Congress reviewing President Trump’s tax returns, but it can’t happen as quickly as some Democrats want. She said that Democrats “have to be very, very careful as we go forward…. it's not an issue of just sending a letter.” TPC’s Steve Rosenthal and other tax experts told a House panel that the Ways & Means committee has broad authority to demand the returns. Trump is expected to refuse any committee request.
“You won’t believe it.” Progressives finally are starting to describe what they mean by a Green New Deal. And TPC’s Howard Gleckman says their plan, which would include a new money for infrastructure, a guaranteed job, and access to health care, education, and even healthy food is hugely ambitious—and would be very expensive. Backers such as Rep. Alexandria Ocasio-Cortez sat the plan would pay for itself through economic growth. That argument, Gleckman notes, is the same one President Trump used to justify the TCJA in 2017. And it is just as flawed.
“They keep saying…” Can tax credits keep low-income renters in their homes? TPC’s Janet Holtzblatt describes how presidential hopefuls and senators Cory Booker and Kamala Harris have proposed refundable tax credits paid directly to low-income renters. The challenge is to deliver the credits on a regular basis so people can actually use them to pay rent. Holtzblatt concludes, “If Congress wants to help struggling families afford adequate housing via a new tax credit for renters, it must develop an effective delivery system for those payments.”
“Maybe they’re seeing something we don’t.” A Republican state representative in Arizona has partnered with the American Cancer Society to promote a bill to raise the taxes on cigarettes, cigars, chewing tobacco, and for the first time, tax vaping products. Revenue estimated at $85 million a year would fund scholarships at the state’s three universities. Some supporters also hope the tax might price teens out of the market, though that would lower revenues. The measure would raise the state cigarette tax from $2 per pack to $3.50. The bill would require voter approval in 2020.
“Now I’m convinced I’m goin’ under.” Rhode Island beverage makers say no way to Democratic Gov. Gina Raimondo’s proposal to double the state’s tax on bottles and cans. They say raising the “litter tax” by one cent per six pack would send customers to Massachusetts. But the state expects to generate an additional $2.1 million in annual revenue, and thinks consumers can afford an extra one-sixth of one penny per can of soda.
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].
