House Ways & Means Chairman Neal won’t ask for Trump’s New York state tax returns. Bloomberg reports that Neal does not want to bolster the Trump administration claim that Congress has political motivations for its request. New York passed a law in May that would open the door for Congress to get state tax returns of many public officials, including the president.
IMF: US-China tariffs could reduce global economic output by 0.5 percent in 2020. IMF Managing Director Christine Lagarde predicts that taxing all trade between the two countries would cost the worldwide economy about $455 billion. That loss would exceed the size of South Africa’s economy. “These are self-inflicted wounds that must be avoided,” wrote Lagarde, by “removing the recently implemented trade barriers and by avoiding further barriers in whatever form.”
Ron Wyden would end tax breaks for quid quo pro college donations. The top Democrat on the Senate Finance Committee would bar givers from deducting contributions to colleges and universities if the gifts are intended to influence admissions. The bill is in response to this year’s college admissions scandal where celebrities paid schools and go-betweens to get their children into prestigious schools.
Tune in at 9:00 am: Effects of corporate and business provisions of the TCJA. The Tax Cuts and Jobs Act significantly changed how business income is taxed. How has the law affected tax planning and the economy? Join the Urban-Brookings Tax Policy Center and the University of North Carolina Tax Center as experts in accounting, taxation, and economics discuss the issues. Click here for the live broadcast.
What does the TCJA mean for tax expenditures? TPC’s Eric Toder explains the findings of his new paper with former colleague Daniel Berger. They calculate that the TCJA modestly reduced the cost of tax expenditures in the individual income tax and made them slightly less regressive. They estimate that in 2019 individual taxpayers will receive about $1.2 trillion in benefits from tax expenditures. Households in all income groups benefit from tax expenditures, but those in the top 1 percent of the income distribution receive the largest benefits. Had they included corporate tax provisions, the story would look even more favorable to upper income households.
Speaking of tax expenditures: The Section 529 savings plan is a sweet deal. But the Tax Hound finds that as welcome as the 529 benefits are, “we don’t need them, and we should not have them.” A tax expenditure designed to encourage saving for education should be aimed at those who might not otherwise be able to afford college. And it should be big enough to make a difference for those who are struggling to pay. It appears that 529s fall short on both counts.
What would happen if Congress expanded the EITC for childless adults? A new research brief by TPC’s Elaine Maag and Urban Institute coauthors found that this policy expansion would not only increase federal benefits but also boost state EITC benefits for workers in 22 states that piggyback on the federal law. If states continue to conform to the federal EITC, workers in these states would qualify for an additional $1.4 billion in state benefits under the expansion. Learn more through 50-state fact sheets to see how the change would play out in all 50 states and the District of Columbia.
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].
