Much to look forward to in July, says Chairman Brady. The House Ways & Means chair expects to release a bill by July 26 to make permanent $1.1 trillion in temporary tax cuts enacted under the Tax Cuts & Jobs Act. Brady expects a House vote on the deficit-increasing bill before the November 6 midterm elections.
How is the TCJA affecting charitable giving? US Sens. James Lankford (R-OK) and Chris Coons (D-DE) asked Treasury Secretary Steven Mnuchin for “additional information on the potentially alarming decrease in charitable giving in the United States following significant changes to the tax code…” The senators cited research from both TPC and the American Enterprise Institute that predicts a decrease in post-TCJA giving. TPC estimates that gifts will decline by about five percent due to the law’s increase in the standard deduction and its cap on deductions for state and local taxes, which will reduce the number of those who will take itemized deductions for their charitable contributions.
IRS will no longer require most tax-exempt organizations to share identifying information about donors. Many tax exempt organizations will no longer have to report the names and addresses of their contributors who give $5,000 or more. They still have to collect the information, however, because if the IRS asks, they must provide the information.
A vote Thursday on a new IRS Commissioner. The Senate Finance Committee plans to vote Thursday, July 19, on Charles Rettig’s nomination to head the IRS. Rettig would serve for the remainder of a five-year term that began in November 2017 and held currently by Acting Commissioner Dave Kautter.
French tax cuts may hurt the French nonprofit sector. The nation’s 1.3 million nonprofits spend 3.4 percent of French Gross Domestic Product (GDP). The sector has been growing rapidly since 2008, but when President Emanuel Macron’s government abolished the wealth tax, it eliminated tax-deductible charitable donations. It also cut the payroll tax and increased a flat tax on income—earned largely by elderly pensioners, who tend to give to charity. The full impact of the tax changes on the nonprofit sector will be clear in 2019, when nonprofits in France close their books.
New papers on municipal finance will be presented this week. The 2018 Municipal Finance Conference at the Brookings Institution features a paper on the future of the retail sales tax by John Mikesell of Indiana University and Sharon Kioko of the University of Washington. They find that retail sales taxes are inefficient, inequitable, and hard to administer. Komla Dzigbede of SUNY Binghamton and Rahul Pathak of Baruch College have a paper on how Kansas tax cuts raised municipal borrowing costs. They find that large tax cuts reduced credit ratings on state and municipal bonds and raised interest costs.
The tariffs battle heads to the WTO. China announced its filing with the World Trade Organization yesterday following President Donald Trump’s latest threat of tariffs on another $200 billion in Chinese goods. Soon after, the Trump Administration filed separate WTO claims against China, the European Union, Canada, Mexico and Turkey—challenging their retaliatory tariffs against the US.
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.
