It’s not about winning a trade war, it’s about identifying the losers. TPC’s Eric Toder considers President Trump’s threatened trade war: “Ostensibly, his targets are China, Canada, and the members of the European Union. But the real conflict in a trade war is… among different groups within countries that either benefit from or are hurt by trade restrictions… In today’s world, most American business and most American consumers could end up losers.”
A carbon tax mashup—a new climate tax and a freeze on climate regs. GOP Rep. Carlos Curbelo of Florida has introduced a new carbon tax. About 75 percent of the revenue would fund infrastructure, 10 percent would go to federal grants for low-income households and the remainder be used for energy research and a fund to assist displaced energy workers. In return, Curbelo would freeze climate regulations and repeal the federal gas tax. The plan has almost no Republican support in the House.
Massachusetts’ marijuana sales rollout is slow—will its state tax revenues meet expectations? The Massachusetts Taxpayers Foundation says the state budget’s s $63 million revenue target is too optimistic. The Cannabis Control Commission has licensed only one marijuana retailer and no dispensaries have opened. Negotiations between cannabis businesses and local communities are ongoing.
The American Bar Association discloses theft through Form 990. Forbes reports that an ABA staff member diverted $1.3 million over eight years from the organization. The ABA discovered the theft last September and fired the employee. Why is the news out now? Simple: When the ABA, a nonprofit organization, filed its annual Form 990 it answered “yes” to the form’s question “Did the organization become aware during the year of a significant diversion of the organization's assets?”
IRS Commissioner nomination vote is on hold. The Senate will wait to vote on Charles Rettig’s nomination to be IRS Commissioner, reports TaxNotes. Democrats are concerned about new donor disclosure regulations released by the IRS last week. The vote may vote on the nomination next week, before the Senate takes a one week recess beginning August 6.
Canada will respond to challenges posed by US tax cuts. Finance Minister Bill Morneau told Bloomberg News that this year’s annual fiscal update will include Canada’s response to the new 21 percent US corporate income tax rate. Business groups have pressured Morneau to reduce Canada’s corporate tax rater to remain competitive with the US. The update will address will business taxation, oil pipelines, and the renegotiation of the North American Free Trade Agreement. Exactly how remains to be seen.
India’s Goods and Service Tax rate cuts may reduce government revenue by $2.2 billion a year. Federal and state finance ministers reduced tax rates on more than 50 goods over the weekend and the resulting loss of annual tax revenue may force India to miss its budget goals this year. It cuts tax rates for items ranging from washing machines to stone-carved deities. India’s finance minister says the revenue loss will be minimal, but officials told Bloomberg that the tax cuts will slash revenue by up to $2.2 billion. Prime Minister Narendra Modi faces re-election next year, and has plans to increase spending on welfare programs.
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.
