TCJA thoughts on the Hill… There’s no consensus among Senate Republicans about whether to try to make permanent the individual tax cuts in the Tax Cuts and Jobs Act. Some lawmakers have faced voter backlash over the bill’s impact on the deficit, compounded by the $1.3 trillion spending bill they passed in March. But Majority Leader Mitch McConnell says making the individual cuts permanent is “something we ought to take a look at.” Meanwhile, the Senate Finance Committee will hold a hearing on early impressions of the new tax law next Tuesday, April 24.
What about revisiting this year’s budget deal? While McConnell is considering another tax bill, he’s thrown cold water on a White House plan to reverse some of the new spending in this year’s omnibus budget plan. The Trump Administration says it may try to block about $60 billion in funding that’s in the bill. But McConnell told Fox News, “We had an agreement with the Democrats. You can't make an agreement one month and say, 'OK, we really didn't mean it.'"
TCJA Regulations: Will Treasury fill in the blanks? TPC’s Howard Gleckman explains that tax experts see Treasury and the IRS having to balance multiple—and sometimes conflicting goals—as they prepare guidance to help taxpayers comply with the new law. They discussed the challenges at last week’s Tax Policy Center Don Lubick Symposium. Said former top Treasury tax official Eric Solomon, “The guidance process will go on for years.”
A deal might be sweet, but not smart. TPC’s Gleckman considers his home state of Maryland’s offer to give Amazon as much as $5.6 billion in state tax breaks, nearly $1 billion in local tax subsidies, plus another $2 billion in unspecified transportation and infrastructure upgrades if the firm builds a second headquarters in Montgomery County. Is this deal going to yield enough economic development to offset state and local government costs? “The short answer is: almost certainly not.”
Can a city’s “head tax” be a recruitment tool? Sure—for that city’s suburbs. That’s what the regional business community surrounding Seattle, Washington, says about the city’s proposal to tax large employers for every in-city employee. Seattle would use the revenue to fund additional homeless services. Said one local chamber of commerce president, “The Seattle City Council is way more effective than our own marketing department. They make business hurt and we make them welcome.” Seattle firms may indeed hurt. Amazon would pay an additional $20 million a year in taxes, should the idea become reality.
Tax filing season ends a day late and hopefully no dollars short. The IRS is back online, after resolving a technical glitch that prevented taxpayers from filing their returns by the original April 17 deadline. “IRS teams worked hard throughout the night [of April 17]” Acting Commissioner David Kautter said. “We are back up and running. The overnight performance means that the IRS is current with all of the tax submissions, and no backlog remains.”
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
