Pete Buttigieg and Amy Klobuchar drop out. The two presidential candidates, who cast themselves as moderates, withdrew ahead of today’s Super Tuesday primaries. Both support expanding refundable tax credits but oppose confiscatory taxes on the wealthy. Of the remaining major candidates, Joe Biden and Mike Bloomberg share their views. Bernie Sanders and Elizabeth Warren eschew most new tax credits but favor big tax hikes on the rich.
Closing the tax gap. Former IRS Commissioner Charles Rossotti has developed a plan that he estimates would reduce the tax gap by about 22 percent over 10 years. Rossotti’s plan would increase third-party reporting of some business income and use new technology to transform IRS compliance and assistance. Much of the new reporting would be aimed at small business, but he would exempt sole proprietors with less than $25,000 in business income. Other changes would enhance the agency’s ability to match existing third party data with tax filings. He describes his proposal in TaxNotes here (paywall).
The Treasury budget and Trump’s tax returns. Treasury Secretary Steven Mnuchin is scheduled to testify today before the House Ways & Means Committee on the department’s 2021 budget request. But the topic de jour is likely to be his refusal to turn over to the committee President Trump’s tax returns. Don’t expect to hear much about the fine points of funding for the agency’s vehicle auction program.
Funding the coronavirus response. Congressional appropriators may outline an emergency funding bill of up to $8 billion to respond to the growing outbreak. Congress, which works quickly when it must, could pass the bill by next week.
A Texas-sized battle over which cities collect Internet sales taxes. Normally, sales taxes on remote sales are paid to the buyer’s home jurisdiction. But in Texas, some local governments have worked out deals with big retailers so the firms collect the tax for the seller’s location. They do this by establishing “customer service centers” that nominally distribute products, though often they do not. The cities then kick back a share of the tax revenue to the sellers. The state comptroller has weighed in.
Getting around may get more costly in Massachusetts. State House Democrats are proposing a 5 cent-a-gallon gas tax hike and a 20 cent-per-ride increase in ride sharing fees to $1.20. Republican governor Charlie Baker opposes the gas tax hike but supports the new ride-sharing fee.
Economic development tax breaks are a bust in Maine. The legislature’s Office of Program Evaluation and Government Accountability reports that corporate tax subsidies have failed to boost business investment in the state. It concluded that 8 percent of businesses in the state received three-quarters of the benefits of one subsidy.
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].
