Senate Finance Committee says farewell to long-time staffer Mark Prater. After serving the committee for almost 30 years, Prater will leave his current post as deputy staff director and chief tax counsel. Chairman Orrin Hatch said, “Mark has played a vital role in every major tax debate in the last quarter century… [He] has proved instrumental…to the passage of the largest tax rewrite in more than 30 years through Congress — we couldn’t have done it without him." No word yet on where Prater is headed. Brendan Dunn, Senate Majority Leader Mitch McConnell's chief tax aide, left last Friday. A long line of senior Hill tax staffers is expected to head for the exits in the coming months.
IRS preparations for the 2018 filing season are on track. Acting Commissioner David Kautter told the Senate Appropriations Committee that the IRS is making post-Tax Cuts and Jobs Act changes for next year’s filing season. “We are on track. You could always do better, we could always move a little faster, but I think we're in pretty good shape.” At the same hearing, Treasury Secretary Steven Mnuchin said the agency was developing a new five-year plan to improve information technology at the IRS. He promised details within 90 days.
Who will owe federal income tax this year? CNN Money’s Jeanne Sahadi explains the latest TPC estimate. Just under 79 million households, or 45 percent of taxpayers, will pay no federal income tax [GH2] this year. The TCJA increased the number by 2.3 million households. Most non-payers are low-income or middle-income households But TPC estimates that for 2018, about 7 percent of filers with incomes between $86,000 and $150,000, and about 1 percent of filers making more than $150,000 won't owe any federal income taxes. Most nonpayers of federal income tax, however, will pay payroll taxes, sales taxes, or excise taxes.
Did governors make the most of their Opportunity Zones? Treasury and the IRS recently designated Opportunity Zones that were proposed by governors. Businesses and individuals will get new tax incentives to invest in low-income and undercapitalized communities. But in new research, the Urban Institute’s Brett Theodos and Braydon Meixell find that while residents of the designated zones have lower incomes, higher poverty rates, and higher unemployment rates than in eligible non-designated tracts, the zones were not well targeted to communities with low investment.
Oregon’s governor gets her small business tax cut during a single-day legislative session. Democratic Governor Kate Brown wanted to expand a small business tax break to sole proprietorships, and the legislature gave her what she wanted. The small business tax break passed on Tuesday extends a 2013 measure to about 12,000 businesses. About half are expected to take advantage of it, trimming state tax revenue by $11.3 million in 2018.
Don’t like the head tax? Well then we don’t like you.” Seattle businesses are busy collecting signatures to repeal the city’s newly enacted head tax on large employers. Supporters of the head tax are responding with calls to boycott those businesses.
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.
