Trade news from China and the Senate. China says its top trade official will travel to the US next week to sign “phase one” of its new trade deal with the US. The agreement postpones planned tariff increases but leaves unresolved many key controversies, including China’s treatment of intellectual property. Meanwhile, Senate Finance Committee Chairman Chuck Grassley wants to limit presidential authority to impose tariffs for national security purposes.
Reps. Neal and Lewis: IRS needs to expedite refund process for some nonprofits. The Tax Cuts and Jobs Act (TCJA) required some nonprofits to pay a 21 percent unrelated business income tax on their employee transportation benefits. Congress retroactively repealed the tax in December 2019 but the non-profits have no way to get refunds. Ways & Means chair Richard Neal and Rep. John Lewis in a statement this week said, “Congress did our part to right this wrong — now it is time for the IRS to provide tax-exempt organizations with the guidance they need to claim and receive the refunds they are due.”
Neal and Lewis also want a permanent Taxpayer Advocate. The two House Democratic tax leaders also are demanding that Treasury pick a permanent National Taxpayer Advocate. The slot has been held by an acting head since last summer.
Helping gig workers with taxes. The IRS has launched a new Gig Economy Tax Center to help contract workers and others navigate the federal tax system. Gig workers struggle with estimated payments and payroll taxes, in part because they have no employers to manage their tax payments.
The Urban Institute has a new tool to assess the social impact of Opportunity Zone investments. Opportunity Zone (OZ) tax incentives, enacted under the TCJA, encourage private investment in real estate and businesses in designated communities. The Urban Institute has developed a new tool that assesses the potential social impact of OZ investments. Stakeholders can use it to determine whether a project aligns with community interests. It can assess operating business; residential, commercial, or industrial development; or some combination of projects.
“Reports of [Georgia’s film tax credit success] have been greatly exaggerated…” State auditors report that Georgia’s Department of Economic Development used an inflated multiplier to calculate credit-related economic activity and reported misleading job numbers. Many of the reported jobs were not related to the credit. Auditors say the film tax credit had an estimated net economic impact of less than $3 billion, but Georgia has awarded a total of about $4 billion in tax credits since 2010.
Speaking of economic impact: A survey of CFOs finds that 97 percent expect the economy to slow in 2020. Deloitte’s fourth quarter survey of 147 chief financial officers from large companies in the US conducted in mid-November shows an uptick in bearish sentiment from 88 percent in the first quarter of the year. However, only three percent of CFOs expect a recession, compared to 15 percent at the start of 2019. CFOs cited trade policy as the top external threat to the economy.
January 28: “Tackling the Tax Code: Efficient and equitable ways to raise revenue.” The Hamilton Project at the Brookings Institution will host a forum exploring efficient and equitable ways to raise revenue. It will begin with a discussion with former Treasury secretaries Tim Geithner, Bob Rubin, and Larry Summers, followed by panels of academics, former government officials, and journalists. Register here to watch online, or register here to attend in person.
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