Is tax reform on the runway or stuck at the gate? In his meeting with airline industry executives, President Trump said his tax reform plan is “coming along very well. We're way ahead of schedule… we’re going to announce something… over the next two or three weeks that will be phenomenal.” Trump said. The President set similar expectations about a health care plan, but never delivered and recently admitted that it may take until 2018 to replace the Affordable Care Act.
Maybe you should check the flight board after all. The House GOP plan for a border-adjustment tax just took a hit from Republican Senator David Perdue of Georgia. He told Senate colleagues the tax is “regressive, hammers consumers and shuts down economic growth.” Perdue was once CEO of Dollar General, a retailer that relies on imported goods.
Rules, Schmules. The New York Times explains how Treasury-designee Steve Mnuchin’s promise of “no absolute tax cut for the upper class” is likely to be broken. Top Senate Finance Committee member Ron Wyden dubs this the “Mnuchin rule,” but an analysis of both President Trump’s and the House Republicans’ tax plans indicate that the wealthy will receive the largest tax cuts of all.
How much politicking could churches do if Trump “totally destroyed” the Johnson amendment? The 1950s-era law bars houses of worship that are tax-exempt charities from engaging in political activity. Trump vows to wipe it off the books. But TPC’s Howard Gleckman finds that likely changes would do less than backers hope or critics fear.
Mixing health care reform with tax policy can yield a positive outcome. TPC’s Gordon Mermin’s new brief says the Affordable Care Act’s tax provisions will reduce by the deficit by $46 billion in 2020, when they are scheduled to be fully in effect. Including its Medicaid expansion, the ACA is projected to reduce the number of uninsured by 23 million in 2020.
Alaska’s Democratic lawmakers want to raise taxes. The House Ds would raise oil taxes and limit both cash subsidies and oil-tax credits. Facing a $3 billion deficit, a coalition of Democrats and moderate Republicans will also push to restructure the income tax as well as Alaska’s Permanent Fund dividend.
Michigan’s GOP governor isn’t proposing to cut income taxes. Governor Rick Snyder’s budget does not include a cut to the state’s 4.25 percent income tax, and his Republican colleagues noticed. Whether they’ll pay as much attention to the state’s budget hole remains an open question. Snyder has confidence: “I think we can talk about more than one thing at a time. It's a walking and chewing gum thing, we can do that.”
A tax climbs in China, and US automakers feel the pain. The Chinese government raised the purchase tax on smaller cars from 5 percent to 7.5 percent this year. The rate will climb to 10 percent next year. Ford says its sales there fell 32 percent, while GM says sales fell 24 percent.
Correction: Yesterday’s Daily Deduction inadvertently misspelled the names of two authors. Timothy Dowd of the Joint Committee on Taxation and Robert McClelland of the Tax Policy Center are the authors of “The Bunching of Capital Gains Realizations.” Yesterday’s item on their paper listed “Down” and “McClellan,” respectively. We sincerely regret the errors.
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