Companies are waiting for states to settle on corporate income tax rates. The Wall Street Journal explains (paywall): State taxes have become a larger share of businesses’ tax liability since Congress cut the federal corporate income tax rate from 35 percent to 21 percent. State corporate rates have not changed, and state legislatures tend move slowly.
“Special place in hell” or “irritant.” Top Trump Administration aides are struggling to describe the President’s contretemps with Canadian Prime Minister Justin Trudeau over tariffs. After the Canadian leader blasted President Trump’s trade sanctions on his nation’s steel and aluminum exports, Trump’s trade adviser Peter Navarro said on Sunday there was a “special place in hell” for Trudeau. But on Monday, Secretary of State Mike Pompeo said he was “unconcerned” about what he called an “irritant” in the relationship. Trump himself continued his tweet storm against Trudeau.
Louisiana lawmakers seek a state tax compromise. They’ve begun to hash out a last-minute plan to protect some state services that will be cut once the new budget year begins on July 1. Louisiana faces a budget shortfall of $648 million due to the loss of temporary taxes. Two previous efforts to reach fiscal consensus failed and Governor John Bel Edwards called a third special session to give lawmakers time to replace some expiring taxes and avoid deep spending cuts. The 10-day session starts next Monday.
While South Carolina’s legislature may let Charleston use tourist taxes to control flooding. State law limits how municipalities may use current tourism tax revenues, and Charleston’s Mayor John Tecklenburg wants state lawmakers to allow cities to use up to 30 percent of tourism tax revenues over the next ten years to alleviate flooding. Tourism taxes include the state and local accommodations tax on those staying at hotels and campgrounds and a hospitality tax on restaurants and bars. City officials haven’t said exactly how the money would be used or what programs would lose funding if revenues are allocated to flood control. The city got about $27 million in tourism tax revenue last year.
The City of Brotherly Love considers a new buildings tax to fund affordable housing. Philadelphia’s City Council is considering a new 1 percent tax on construction to help finance low- and moderate-income housing. But Democratic Mayor Jim Kenney is opposed. He fears that the tax would make it harder to lure new companies… such as Amazon.
New York’s Democratic candidates for governor spar over tax hikes. Governor Andrew Cuomo is opposing some tax increases while his primary challenger, actress Cynthia Nixon, is calling for more tax hikes. Cuomo rejects higher taxes to fund subway service improvements or education and has been quiet about whether to extend the current 8.82 percent levy on income over $1 million. It raises $4.5 billion a year, but the rate will fall to 6.85 percent in 2020 without legislative action. Nixon, by contrast, wants to increase the top individual income tax rates and add higher income brackets.
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.
