100 labor and liberal groups oppose a territorial tax system. Organizations including labor unions and progressive interests call on Congress to reject a provision in the Big Six Unified Framework that exempts US companies’ foreign profits from US tax. Their concern: A territorial tax would encourage US companies to move jobs off shore and profits to tax havens.
Apple and Pfizer lobbyists don’t like it either. Bloomberg reports that the firms’ Washington reps are objecting to the outline’s implied minimum tax on foreign profits, though it is unclear how the levy would work. Bob Pozen, chair of TPC’s Leadership Council, calls the approach “modified territoriality,” and says it should prevent the kind of offshore profit shifting the unions worry about.
As for the state and local tax deduction… Gary Cohn, director of the National Economic Council, says the deduction is up for negotiation. The Tax Foundation’s Nicole Kaedig argues that repealing the tax break makes financial and policy sense. She estimates keeping it would reduce tax revenue by $1.8 trillion over ten years and would continue to subsidize higher-income taxpayers in high-tax jurisdictions.
Eliminate certain tax breaks, reduce carbon emissions? A new study, highlighted by The Washington Post, finds that 800 newly discovered US oil fields would not go into production if oil company tax breaks are eliminated. If the tax breaks remain, the wells could produce 17 billion barrels of oil over the next few decades and produce around six gigatons of carbon dioxide.
A federal court blocks an Obama-era anti-inversion rule. The US District Court for the Western District of Texas has blocked an Obama-era anti-inversion rule that was aimed at stopping the proposed Pfizer and Allergan merger. The deal eventually fell through. The court ruled that IRS and Treasury failed to allow for comments on the proposed rule.
Thursday: TPC’s Inaugural Distinguished Speaker Series with CEA Chair Kevin Hassett. TPC, in collaboration with the Tax Foundation, will host the chairman of the President’s Council of Economic Advisers. Hassett will discuss the nation’s fiscal outlook and prospects for tax reform. The event begins with at 9:00 am, and the discussion starts at 9:30. Register here to attend in person. TPC will also provide a live webcast.
East Lansing, Michigan considers an income tax, with an exemption. In November, city voters will decide in November whether to approve a 1 percent tax on residents’ income and a 0.5 percent tax on income earned by non-residents workers. But first, the city will consider an exemption for those making less than $5,000 a year. Among those who’d qualify: One-quarter of the students at Michigan State University. The city council will consider the exemption next week.
