“What would you do if I sang out of tune?” Senators on both sides of the aisle are concerned that the president’s budget proposal does not provide enough funding for the IRS to administer the Tax Cuts and Jobs Act. President Trump has proposed an additional $362 million in a "program integrity cap adjustment” plus $397 million over two years to implement the new tax law.
“Would you stand up and walk out on me?” Trump would support legislation to expand the authority of states to require online retailers to collect sales tax, Treasury Secretary Steven Mnuchin told the House Ways & Means Committee yesterday. Mnuchin did not say which of the many bills on Capitol Hill the president would back.
“Lend me your ears and I’ll sing you a song.” The House Ways & Means Committee is open to suggestions for clarifying or correcting errors in the TCJA, Chairman Kevin Brady told the Tax Council Policy Institute yesterday. He said the committee would develop “a punch list of provisions” that should be addressed either administratively or through revenue code changes. Senate lawmakers have indicated that one change—in the tax treatment of grain sales to farm co-ops—could end up in the omnibus budget bill that Congress must pass by March 23 to keep the government open.
“I will try not to sing out of key.” Treasury Secretary Steven Mnuchin promises a tax withholding calculator next week. He told the Ways & Means Committee yesterday that the IRS will post the calculator for workers to double check their post-TCJA withholding. If you can’t wait to see how you make out in the TCJA, check out TPC’s calculator.
“All I need is my buddies.” Senate Finance Committee Chair Orrin Hatch wants to IRS to probe whether not-for-profit hospitals deserve their tax-exempt status. Hatch, along with former panel chair Chuck Grassley, worries that hospitals are not providing sufficient benefits to their communities.
“I’m gonna get high with a little help from my friends.” Berkeley, California cuts the tax on recreational marijuana, which has been legal for sale in the city for barely two months. The city council voted to cut the business license tax on retailers in half, from 10 percent to 5 percent, effective at the end of March. Mayor Jesse Arrguin says the tax cut will make the city more regionally competitive.
“How do I feel at the end of the day?” Michigan taxpayers will get a state tax cut. Governor Rick Snyder will sign bills to continue and raise Michigan’s personal exemption. The exemption will grow gradually to $4,900 by 2021, which is $600 higher than its current scheduled increase. That amounts to a $25.50 tax cut per individual, or $102 for a family of four. Starting in 2022, the exemption will grow with inflation.
“That’s just where I’m going.” Save the date: On Wednesday, March 7 TPC will hold an event on wealth taxation, entrepreneurship and philanthropy. A panel of experts will discuss new research that examines how estate taxes affect entrepreneurship and how income and estate taxes affect the very wealthy. They’ll discuss how taxes affect giving patterns among wealthy entrepreneurs and ways entrepreneurs are engaging in philanthropy.
The Daily Deduction will not publish on Monday, February 19, in observance of Presidents’ Day. It resumes its regular schedule Tuesday, February 20. 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.
