Gas tax talk at the congressional GOP retreat. Reactions were “mixed,” according to House Transportation and Infrastructure Committee chairman Bill Shuster. Raising the federal gasoline tax to support infrastructure improvements was “the elephant in the room,” he says. The President expects Congress to come up with a way to finance his $1.5 trillion infrastructure plan.
How the TCJA’s pass-through deduction works. TPC’s Aaron Krupkin and Bill Gale have a new brief describing the ins-and-outs of the Tax Cuts and Jobs Act’s pass-though rules. That 20 percent deduction is sweet, but getting it depends on the nature of the business activity, the total income of its owner, and perhaps how much the business pays its employees and how much property it owns Aaron and Howard Gleckman have some highlights here.
About that swamp. The liberal group Public Citizen reports that more than 7,000 lobbyists registered to influence the TCJA in 2017, roughly 60 percent of all K Streeters. The US Chamber of Commerce alone had 115 suits roaming Gucci Gulch.
Donate now, give later. Another effect of the TCJ: The Wall Street Journal reports on a boomlet (paywall) in donor-advised funds. They allow a taxpayer to take an immediate deduction for donations to their fund, but specify in the future how the donation will be distributed to charities. This allows them to bunch gifts into one year and thus still benefit from itemizing deductions, which the TCJA otherwise discourages. The funds, mostly held by financial firms, held $85 billion in 2016.
Let them eat Twinkies. Hostess Brands announced that it will give employees one-time bonuses of $1,250—awarded as $750 in cash and $500 toward 401(k) accounts. The company will also offer a year’s supply of the company’s snack cakes—or one multi-pack per week for 52 weeks. Hostess credits the TCJA for the rewards.
Lowe’s gives employees bonuses following the TCJA. The hardware chain will give some employees bonuses of up to $1,000, based on length of service. Starting May 1, the firm will expand benefits including maternity and parental leave and adoption assistance.
Microsoft takes a big quarterly tax hit. Revenue in the tech giant’s second quarter exceeded estimates, but a $13.8 billion charge due on taxes owed on overseas cash contributed to a net loss of $6.3 billion.
Dems have a plan… or at least a promise. Should the Democrats win control of the House of Representatives in November, they’ll try to repeal parts of the Tax Cuts and Jobs Act. They’d replace them with their own plans — but have not yet specified what they’d do, other than shift tax “benefits from the wealthy to the middle class.” House Minority Leader Nancy Pelosi said she’d seek bipartisan reforms should the Democrats regain a House majority.
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.
