President Trump promises more tax cuts by October while GM shares a warning. Trump told Fox News: “One of the things we’re thinking about is bringing the 21 percent down to 20 and for the most part, the rest of it will go right to the middle class…It’s a great stimulus.” Meanwhile, General Motors said Friday that if the president follows through on his latest threat of tariffs on cars and auto parts, there could be “less investment, fewer jobs and lower wages” at GM. So much for stimulus?
Treasury rolls out its new Form 1040. The President wanted a postcard. He got..a very big two-sided postcard and five new supplemental schedules. Not clear where the stamp goes. Treasury says the new 1040 is a draft, and that it will take comments over the summer.
Indexing capital gains? Up to Congress, not Treasury, says Secretary Mnuchin. The Wall Street Journal reports (paywall) that Mnuchin deferred action to adjust capital gains for inflation. “Consider that with obviously other parts of Tax [Reform] 2.0… If we’re not able to complete [that], then we’ll go back to the drawing board and decide whether we want to consider this on a non-legislative basis.” Congress has virtually no chance of passing another tax bill this year. Treasury considered indexing capital gains in 1992, but determined that it did not have the legal authority to do so.
It’s official: No local soda taxes in California. Governor Jerry Brown signed a law prohibiting local governments from taxing sugary drinks for ten years. In return, the state, cities, and counties will not face higher voting thresholds to raise other taxes.
How many couples exercised their new same-sex marriage rights, tax-wise? Supreme Court rulings in 2013 and 2015 established and expanded rights to same-sex marriage in the US. This means legally-married same-sex couples file federal tax returns as married couples. A new TPC research brief estimates that about 0.5 percent of all joint filers are same-sex couples, though the percentage varies widely among states.
Online Sales Tax — What’s next for states ? TPC’s Richard Auxier and Kim Rueben review the evolution of taxing online sales, trace relevant Supreme Court rulings over 50 years, and discuss the future of online sales tax in the states. It all started when the Court ruled in the 1967 National Bellas Hess dcase that a business must have a physical presence within a state’s borders for the state to collect sales taxes from that business. Auxier and Rueben explain how the ruling has become increasingly problematic as untaxed online purchases increase and states grapple with collecting revenue from these remote sources.
Congress in not in session. The Daily Deduction will return to its regular schedule on Monday, July 9.
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