House passes a bipartisan retirement savings bill with a TCJA kiddie tax fix. The House passed the SECURE act 417-3. The bill is designed to encourage more businesses to offer retirement plans and also would reverse provisions of the Tax Cuts and Jobs Act that increased taxes on children’s unearned income—including benefits received by children of deceased military or first responders. The House bill excludes a Senate provision that would have expanded 529 education savings accounts to pay for home schooling costs, including supplies.
House Committees pass spending bills. President Trump wanted Congress to cut domestic spending, but instead the House Appropriations subcommittees on Agriculture and Transportation approved bills that would increase funding for the departments of agriculture, transportation, and housing and urban development. They are the ninth and tenth spending bills approved by the panels. Two more to go….Meanwhile, talks between Congress and the White House on a comprehensive two-year spending plan seem to have broken down, at least for now.
Ron Wyden tries again to end carried interest tax breaks. Since his campaign, Trump has said he favors the idea, so the top Democrat on the Senate Finance Committee has introduced a bill to end special tax treatment for compensation of hedge fund and private equity managers. Wyden’s bill would require fund managers pay ordinary income tax rates and self-employment tax on their compensation.
New York Fed study: President Trump’s tariffs on Chinese imports will cost a US household $831 annually. Three staff economists estimate that last year’s 10 percent tariffs on Chinese goods raised costs to consumers by about $414. The additional import taxes Trump announced earlier this month would increase the total cost (including taxes and deadweight loss) to $831. The estimates are roughly consistent with other projections and suggest the tariffs would eliminate most of the benefits of the TCJA for typical middle-income households.
On June 6: A conference on the effects of corporate and business provisions of the Tax Cuts and Jobs Act. TPC and the University of North Carolina Tax Center host a program on what the 2017 law means for business. Among the topics: How did TCJA affect compensation, corporate payouts, US-based multinationals, overseas firms, and pass-through businesses. Register here for the event. It will also be webcast live here.
And on June 11: Fighting Poverty and the Rising Cost of Living. How should policymakers change the Earned Income Tax Credit to improve the economic well-being of low- and middle-income families? The program will feature keynote addresses by Sen. Sherrod Brown of Ohio and Rep. Gwen Moore of Wisconsin and a panel discussion. Panelists include Chris Hughes of the Economic Security Project, which supports this event; TPC’s Elaine Maag; Aparna Mathur of the American Enterprise Institute; and Asha Nyandoro of Springboard to Opportunities. Ellie Anzilotti of Fast Company will moderate. Register for the event here.
Congress will not be in session next week. The Daily Deduction will post Tuesday, May 28, in observance of Memorial Day, and will return to its regular schedule on Monday, June 3.
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].
