Tonight: The President may share some details of his budget plan. In an address to a joint session of Congress, the White House says President Trump will propose a 10 percent increase in defense spending offset by a $54 billion cut from nearly all other federal agencies. However, defense budget experts say Trump's military spending increase is closer to 3 percent. It is unclear what his proposal would mean for specific non-defense programs. The White House promises to release more details in a budget outline next month.
How will the IRS fare in these budget cuts? The agency is likely to be targeted, again. Perhaps not coincidentally, the agency’s criminal investigations unit released its annual report. It showed a significant decline in both staffing and new investigations over the past five years. Identity theft is now the second largest source of new cases, after drug-related investigations.
What do currency markets tell us about the chances for border-adjustable tax? TPC's Len Burman finds they've barely budged in response to all the talk about a BAT. That may mean they don't believe that the value of the dollar would increase in response to a border adjusted tax. Or it may mean they're discounting the BAT’s chances of passing Congress. On the other hand, equity investors seem relatively bearish about the stocks of retailers, who fear the BAT would raise their costs of imported goods.
Whatever happens this year, tax reform will probably be small, says Warren Buffett. The billionaire investor and philanthropist thinks GOP lawmakers may be aiming too high in their tax reform plans. It’s just not possible, given their self-imposed deadline and political obstacles, Buffett predicts: “When the Treasury secretary says we're trying to have this by August or something, you're not going to get a really 1986-type overhaul or a 1954-type overhaul or a 1969-type overhaul.”
Kansas’ business tax exemption remains a wedge between Governor Brownback and lawmakers. The GOP-controlled legislature repealed it and raised other taxes to balance the state budget, but Brownback vetoed the measure. The question now is how much of a tax hike the governor, who has built his reputation as a tax-cutter, will accept. He says he’d consider an income cap on the exemption, but still believes the measure helps “grow business in Kansas.”
The IRS releases its 100th eBook. The agency’s two-year-old eBooks effort gives taxpayers a way to read and review some of the most commonly used IRS tax products, like Form 1040 instructions or Publication 17, on their smart phones, tablets and eReaders. “This milestone reflects our continuing commitment to share information with taxpayers so they have the information they need in the way they prefer,” said IRS Commissioner John Koskinen.
Will UK tax changes shrink public sector employment? Those contracted to perform government services could lose up to 30 percent of their take-home pay given upcoming tax changes. A rule to be introduced in April would require employers of contracted public sector workers to subtract tax and national insurance contributions from those workers’ pay. Workers have so far been allowed to calculate their own tax, but the UK government says that 90 percent have underpaid, to the tune of £400m a year. The change could prompt these workers to find private sector employment, where the new rule would not apply.
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