Cease fire in China trade war? Treasury Secretary Steven Mnuchin told Fox News yesterday that since China and the United States have made progress in their trade negotiations, the Trump Administration is putting its threatened Chinese tariffs on hold. Earlier this year, the president said he’d tax Chinese steel and aluminum, as well as $150 billion in other Chinese goods. China has made vague promises that it would buy more American agricultural products and energy but details remain sketchy. And it is not clear whether free-trader Mnuchin is speaking for Trump, who is getting conflicting, more hawkish trade advice from others in the Administration.
Kevin Brady releases a welfare reform bill. The Ways & Means chairman proposed The Jobs and Opportunity with Benefits and Services (JOBS) for Success Act (H.R. 5861). The bill would rename the Temporary Assistance for Needy Families (TANF) program and target benefits to the lowest-income households. Although the House GOP leadership promised to include an expansion of the Earned Income Tax Credit as part of an upcoming welfare reform bill, this measure does not appear to include any EITC provisions.
Ways & Means members urge Senate Finance to consider IRS technology bill. TaxNotes reports (paywall) that House Ways and Means members Suzan DelBene, D-Wash., and Mike Bishop, R-Mich., have asked Senate Finance Committee Chair Orrin Hatch to include the 21st Century IRS Act (H.R. 5445) in the Finance panel’s IRS proposal. The House bill would address identity theft through a public-private partnership,, amend the duties and responsibilities of the IRS chief information officer, and provide for the development of individual taxpayer online accounts. No response yet from Hatch.
Who will pay the AMT? The Wall Street Journal looks (paywall) at who will pay the Alternative Minimum Tax under the new federal tax law. Under prior law, millions of middle- and upper-middle income households owed the AMT but the Tax Cuts and Jobs Act exempts most of them from the levy. TPC’s Joe Rosenberg estimates that only 200,000 taxpayers will pay the AMT in 2018, down from five million last year. Only 120,000 people earning $500,000 or less will pay, down from four million in 2017. But unless Congress acts, the AMT will revert back to pre-TCJA rules in 2026.
Pennsylvania to utility companies: Pass on federal tax cut savings to customers. The state’s Public Utility Commission has ordered 17 major utility companies to pass corporate tax savings under the TCJA on to their customers by decreasing monthly distribution charges. The reductions go into effect on July 1 and will save Pennsylvania customers $320 million.
Some tax moves in Missouri. Meeting their Friday deadline, the Missouri legislature approved a cut in the state’s corporate tax rate from 6.25 percent to 4 percent, starting in 2020. It also approved an individual income tax rate cut from 5.9 percent to 5.5 percent starting in 2019. The rate could fall to 5.1 percent if Missouri meets revenue targets. The legislature also approved a November ballot measure on a proposed 10 cent increase in the state’s17 cents per gallon motor fuel tax by 2022.The tax bills still must be signed by the governor.
Nashville’s city council proposes a big property tax hike. Facing a big budget shortfall, city council members recommend a 50-cent property tax increase to $3.655 per $100 of assessed value. The 15.9 percent hike would fund schools and pay raises. It would be the first property tax increase in Nashville since 2012 and generate about $150 million in new revenue.
Denmark has a plan to reduce tax evasion by Airbnb hosts. The government has made a deal with the online home-rental platform. Airbnb will automatically report homeowners’ rental income to Danish tax authorities. Homeowners would owe tax on rental income in excess of 40,000 kroner (£4,690) a year. The Danish parliament first needs to approve the measure.
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