Well, that doesn’t sound promising. House Speaker Paul Ryan says Senate Republicans should “keep their powder dry” and withhold criticism of the House GOP tax plan—they haven’t seen it yet, after all. But the Senate may have already heard enough about one key element: The controversial border-adjustable tax. Senator Lindsey Graham says the plan “won’t even get ten votes.” Worse,”the Congress is stumbling. Republicans in the Congress — we’re all tied up in knots,” Graham said on Face the Nation on Sunday.
Bill Gates has a tax idea: If a robot takes a human’s job, tax it. Microsoft founder and billionaire philanthropist Bill Gates says more automation means fewer people will work and pay income tax. So, he asks, what if companies paid a tax on their use of robots based on the savings companies enjoy from automation? The idea isn’t new. European lawmakers proposed a similar idea, but the EU rejected it. Wonder how many votes it would get in the Senate?
As for capital gains taxation: Investors aren’t as sensitive as one would think. TPC’s Rob McClelland explains his latest research with Tim Dowd of the Joint Committee on Taxation. They find that “while investors do react to changes in capital gains taxes, the shift is much less dramatic than a simple view of recent history suggests… Investors clearly respond to taxes and increased rates lead to lower realizations. However, their timing of some realizations ignores the difference in tax rates.”
In Beantown, a bean-counting failure. Bostonians can claim a residential exemption on their property taxes equal to 35 percent of a home’s assessed value. But a recent audit finds that over the past six years, thousands of Bean Towners who were not qualified claimed the exemption anyway. Under current law, there’s no way for the city to recoup the lost revenue. Adding insult to injury: The city raised residential property tax rates to cover the cost of the exemption. The news could be worse: At least the Sox have started spring training.
In Minnesota, a group of nonprofits with gambling income seeks tax relief. The Star-Tribune reports that these organizations paid $60.6 million in state taxes and fees and directed $62 million to charity work. Non-profits pay taxes on their gross receipts less prizes paid at a progressive rate. But the group wants the state to exempt from tax any gambling revenue used for charitable purposes. Nonprofits would still pay taxes on income used for operations.
Down under, Uber is just a taxi service. Australia’s federal court ruled last week that drivers for the ride-sharing service must register and pay the nation’s 10 percent goods and services tax. Unlike other professions which require registration and payment of the GST when they earn more than $54,000 a year, taxi drivers have to pay the tax regardless of their annual earnings. If taxi drivers had an earnings threshold, those subject to the tax might charge higher fares.
Congress is in recess this week. The Daily Deduction will return to its regular schedule on Monday, February 27.
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