On tariffs and tall boys. As world leaders and markets reeled from President Trump’s pronouncement that the US will impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, US Commerce Secretary told CNBC that tariffs will have a trivial effect on consumer prices. He held up a Budweiser tall boy and Coca-Cola can to prove his point, saying prices for those items would go up by fractions of a penny. Of course, one man’s “trivial” is another woman’s “terrible.” TPC’s Elaine Maag noted in 2011, “a typical single-parent faces annual tariffs, hidden in the price of goods, of almost $400 a year.”
An updated budget outlook isn’t any brighter than before. The Committee for a Responsible Federal Budget reports that “under current law, trillion-dollar deficits will return permanently by next year and debt will exceed the size of the economy within a decade. Under potentially more realistic policy assumptions, the country will be facing a $2.4 trillion deficit and debt of 113 percent of Gross Domestic Product (GDP) by 2028.” The Tax Cuts and Jobs Act would shrink revenues to their lowest, non-recession levels in 50 years.
Michael J. Desmond to be nominated to serve as IRS chief counsel and assistant general counsel at Treasury. The White House, in a statement released Friday, announced the president’s intent to nominate Desmond, who currently specializes in tax controversy issues as a sole practitioner in Santa Barbara, California. He served as Treasury tax legislative counsel from 2005 to 2008. He has also worked as a trial attorney in the Justice Department Tax Division.
How many same-sex marriages are there, per the IRS? After US Supreme Court rulings in 2013 and 2015 established rights to same-sex marriage, Treasury and the IRS recognized same-sex marriages, too. TPC has a new paper that provides estimates of the population of same-sex tax filers drawn from returns filed in 2013, 2014, and 2015. In 2015, about 0.48 percent of all joint filers were same-sex couples, or about 250,450 couples.
Georgia on Delta’s mind? Governor Nathan Deal signed legislation that kills a tax break that would have saved Delta millions of dollars in sales tax on jet fuel. GOP lawmakers retaliated against Delta’s decision to cease offering a fare discount to members of the NRA. TPC’s Howard Gleckman explains how the situation reflects all that is wrong with economic development tax subsidies.
No carbon tax in the state of Washington, for now. Democratic Governor Jay Inslee and the bill’s main sponsor in the state Senate could not secure enough votes to pass the bill. Had they been able to, Washington would have been the first in the union to levy a tax on carbon-dioxide emissions. Meanwhile, a coalition of organizations hope to secure enough signatures for a November ballot initiative that would put a fee on carbon.
And in Seattle, perhaps a “head tax” to help those who are homeless. A city task force recommends that the City Council adopt an employee-hours tax on high-grossing businesses. The measure could raise as much as $75 million a year. The task force also recommends that in addition to tax revenue, funds “can and should be located by making cuts to public spending outside the homelessness-services sector.” A similar employee-hours tax measure failed in November; it would have cost businesses grossing more than $10 million per year 6.5 cents per employee, per hour.
Down Under: Australian Tax Office will track down bitcoin investors. The government will use everything at its disposal, from data-matching and identification checks to bilateral tax treaties and anti-money laundering powers to ensure transparency and tax compliance among bitcoin investors. “[P]eople shouldn’t assume they can hide forever behind blockchain technology, nor should they assume there are no tax consequences,” said National Tax Liaison Group member Paul Drum.
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.
