The IRS releases its withholding calculator. Here it is, if you want to check to see if your employer got your withholding right in the wake of the Tax Cuts and Jobs Act.
Tracking those corporate tax cuts. A non-partisan group called Just Capital has tracked how 90 public companies say they’ll use the TCJA’s corporate tax cuts. Its company-by-company tally is here. Overall, the firms reported that about 6 percent of their tax savings will go directly to workers through raises, bonuses, and benefits. About 22 percent will go for capital investment or new hires. Fifty-eight percent is earmarked for shareholders through stock buybacks, dividends, or retained earnings. The group says it will directly survey about 900 other corporations that have not yet disclosed their plans.
Tracking the trackers. Organizations across the political spectrum, as well as Wall Street analysts, are closely following—and publishing—what companies are doing with their TCJA tax cuts. But The New York Times takes a look at the groups collecting data and finds that what they report is often driven by their political agendas.
What will consumers do with their tax refunds? A new poll from the National Retail Federation and Prosper Insights & Analytics asked individuals who expect a tax refund this year how they’d use the money. Respondents could choose more than one answer. Notable findings: Forty-nine percent said they would save their refund while 35 percent would pay off debt.
Dana Trier dishes on the TCJA. Trier, who resigned last week as Treasury’s deputy assistant secretary for tax policy, told Politico’s Brian Faler that writing the regulations to accompany the TCJA will be “a bitch of a job.” Trier added the law is “not nearly as bad as people are characterizing it, but still not as good as it should have been.” He identified as especially problematic the law’s international provisions, including its transition tax on past foreign earnings, and its new tax treatment of pass-through businesses.
US Department of Commerce revises downward its economic growth estimate. Its first estimate of economic growth in the fourth quarter of 2017 was 2.6 percent, but Commerce now estimates the economy grew by 2.5 percent. For all of 2017, growth was 2.3 percent. The Trump Administration promises tax cuts and deregulation will result in annual growth of 3 percent through 2020.
Louisiana lawmakers try to hammer out a tax deal. The state has less than a week to close a $994 million budget shortfall for the coming fiscal year. Louisiana expects to collect $302 million in additional state income tax revenue due to federal tax changes. And the legislature is considering tax proposals that would raise another $436 million in additional revenue—still short of what the state needs to avoid cuts to government services.
A tax plan in Iowa gives state Democrats pause. The state’s Legislative Services Agency estimates that a multi-year GOP tax plan will cut general fund revenue by more than $1.16 annually billion by fiscal 2023. Iowa’s annual budget is $7.2 billion. The senate GOP plan would reduce Iowa’s individual income tax by $979 million in fiscal year 2023 and cut corporate income taxes by $267.4 million in the same year. The effort is part of a broader plan by GOP Governor Kim Reynolds, who has vowed to cut personal income taxes by $1.7 billion over six years.
TPC’s Gene Steuerle offers three ways Congress could improve tax incentives for charitable giving. And it can be done with little or no additional loss of revenue: Extend the charitable deduction to everybody but only for gifts that exceed a certain floor; allow taxpayers to deduct gifts made through April 15, rather than December 31; and improve the system charities use to report the gifts they receive to donors and to the IRS.
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