Tax (and trash) talk continues while deficit spending climbs. The President may have picked a fight with Sen. Bob Corker at just the wrong time. The Congressional Budget Office reports that the federal government spent $668 billion more than its revenues in fiscal year 2017, about $82 billion more than in 2016. The deficit is now 3.5 percent of US gross domestic product, up from 3.2 percent last year. The national debt surpassed $20 trillion in September — a first. Corker, a long-time fiscal hawk, says he won’t vote for a tax cut that adds any more to the deficit. TPC estimates that the GOP’s unified tax framework would reduce revenues by $2.4 trillion over the next 10 years.
Goldman Sachs sees little growth from a GOP tax plan. Goldman modeled two options, what it called the “literal” version of what the GOP proposed last month and a scaled-back version that would cut taxes by about $1 trillion over 10 years. It concluded that the $1 trillion stylized tax cut, which is called the likely outcome, would result in modest GDP growth of 0.1 to 0.2 percent by 2019 but little increase in growth rates by 2022. Goldman agreed with TPC that the September outline would reduce revenue by about $2.5 trillion over a decade. Goldman, of course, had been the home of top White House adviser Gary Cohn and Treasury Secretary Steven Mnuchin.
Property owners in Texas won’t see a Hurricane Harvey property tax break. Nearly 300,000 homes suffered damage, but a property tax reform that would have required reappraisals and lower tax bills never made it out of the Texas House. Is it because the bill’s sponsor, Republican state Rep. Sarah Davis, opposes a GOP-backed bill to require people to use the bathroom listed on their birth certificate? Davis thinks so.
Repeal the estate tax? Be careful what you wish for. TPC’s Dan Berger explains how repealing the estate tax, proposed under the Big Six Unified Framework, could sharply reduce charitable contributions. “Eliminating the estate tax would make leaving money to charity more ‘expensive,’ compared to current law. The same logic follows with lifetime giving.”
Airbnb’s tax bill in the United Kingdom seems pretty low. The sharing platform collected £657 million in rental payments from property owners last year but only paid £189,000 in UK corporate taxes. Airbnb books commissions earned in the UK through its subsidiary in low-tax Ireland.
Scotland considers modifications to its tax brackets. The Scottish government wants to raise more revenue for public services, so it may introduce new income tax brackets to lower the levels at which people start paying higher rates. The government will reveal its decision when it releases its budget later this year.
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