For every action, an equal and opposite reaction. After President Trump imposed a tariff on imported solar panels, US solar manufacturers announced plans to invest $1 billion in new domestic capacity. But Reuters reports that US renewable energy companies have canceled or frozen $2.5 billion in their own solar projects in the wake of the tariff on imported panels. Reuters describes this is an example of how “protectionist trade measures almost invariably hurt one or more domestic industries for every one they shield from foreign competition.”
And Senate Republicans battle over tariffs. Trump’s trade sanctions are not popular among Senate Republicans, but the party leadership is scrambling to kill a bill by Tennessee’s Bob Corker that would block the tariffs. Corker wants to attach his measure to a must-pass military spending bill. Majority Leader Mitch McConnell wants to send it off to die in the Finance Committee. Yesterday, in scathing remarks on the Senate floor, Arizona Republican Jeff Flake blasted the Administration’s trade policy as “erratic… irrational… muddled and mercurial.”
The incredible shrinking rescission bill. The Congressional Budget Office estimates that President Trump’s updated request to rescind federal spending already approved by Congress would cut only $1.1 billion from the budget over ten years. For context, annual federal spending tops $4.3 trillion, with a T.
What should the GOP include in the next tax bill? Assume Republicans want a measure that improves the tax code and isn’t just a “message bill.” What should be in it? TPC’s Howard Gleckman has four ideas that would improve retirement savings incentives, capital gains taxation, tax breaks for charitable giving, and the tax treatment of pass-through businesses.
Save June 20: Eighth Annual IRS-TPC Joint Research Conference on Tax Administration. The IRS and TPC will host their annual conference on tax administration. Researchers from the IRS, other government agencies, academia, and private organizations will discuss ways to make tax administration as effective as possible. Space is limited, but the presentations and discussions will be streamed live here. There is no charge to attend the day-long event. IRS employees should register by email through the National Headquarters Office of Research. All others should register here.
In Jordan: Protests 1, Tax Bill 0. Jordan’s government withdrew yesterday a controversial tax hike that sparked nationwide protests. The demonstrations led to resignations of the prime minister and his cabinet. New prime minister Omar Razzaz and parliament agreed to withdraw the bill that would have lowered Jordan’s public debt of $35 billion.
In Russia: President Putin talks taxes and tariffs, briefly. In his annual call-in show yesterday, Putin said he wanted cut the number of Russians living below poverty in half—an initiative that he said would cost 8 trillion rubles, or $129 billion. He said it would not be “expedient” to ditch the nation’s flat tax, but said streamlining the tax system is necessary. Would that include tax hikes? He didn’t say. On Trump’s tariffs, Putin likened them to economic sanctions imposed on Russia. Europeans, Putin said, “got what they deserved.”
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.
