Wisconsin’s online sales tax revenue should fund tax cuts, says Governor Scott Walker. Wisconsin could see $187 million a year in sales tax revenue thanks to last week’s South Dakota v. Wayfair decision. Walker, running for re-election this fall, says, “One way or the other we'd want to get that back to the hardworking taxpayers.” Revenue Secretary Rick Chandler says the issue may need to be resolved by the state legislature… after the election.
Want to know more about Wayfair? Tune in to TPC’s program at 9:00 this morning, featuring a conversation between Sen. Heidi Heitkamp (D-ND) and TPC’s Howard Gleckman.
Will California put a ten-year moratorium on local soda taxes? The state legislature may approve a budget bill that does just that, as part of a developing compromise between organized labor and business groups. In exchange, lawmakers may drop a different ballot initiative that would raise the threshold for passing any new local tax or tax increase to two-thirds of voters or an elected body. Under California law, local taxes that contribute to the general fund can be approved with a simple majority vote.
A proposed gas tax in Utah isn’t wildly popular: What will that mean for its public schools? State lawmakers approved a non-binding November ballot question on a 10 cent-per-gallon tax increase. Expected revenues of $100 million would fund public schools instead of transportation. Lawmakers agreed to put the gas tax hike on the ballot because they didn’t want advocacy groups to push for an initiative to raise sales and income taxes. As part of that deal, the legislature also froze declining property tax rates which could generate over $200 million per year. As of now, 56 percent of Utah voters oppose a gas tax increase.
The TCJA, DC and tax conformity: Win some, lose some. TPC’s Richard Auxier takes a look at the District of Columbia’s tax reform efforts and the obstacles it faces in the wake of the enactment of the Tax Cuts and Jobs Act. "Post TCJA, some households are receiving a bigger-than-expected District tax cut and others are getting a smaller reduction. In fact, depending on family size and whether you’re a half-full or half-empty type, you could consider the 2018 tax cut a tax hike."
Philadelphia’s city council narrowly passes a construction tax. The city council passed the bill by a vote of 9 to 8. It imposes a one-percent tax on new construction and major renovation projects, except for properties in the city’s Keystone Opportunity Zones. Revenue would be directed to affordable and mixed-income housing projects.
Student debt relief is taxable, and can pile up. The Wall Street Journal explains “income-driven repayment plans,” offered by the US Department of Education since 2007. Borrowers can set their student loan payments to 10 percent of their discretionary income. The repayment plan requires payments for 20 or 25 years, after which the debt balance is forgiven. But that balance may grow considerably over that time, since 10 percent of the borrower’s income doesn’t always cover accruing interest. In the year payments are complete, any forgiven debt is taxable. Thus, borrowers could face a lot of huge, one-time tax bills in 2027. Will they be prepared?
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.
