Iowa: The Des Moines Register warns farmers of the cost of tariffs. The newspaper’s front page story explains that new tariffs imposed by President Trump could cost Iowa farmers as much as $624 million. That’s because China just announced that it will respond to Trump’s tariffs on $50 billion in Chinese goods with tariffs on $50 billion in US goods. This includes soybean exports. China imports 80 percent of Iowa’s soybeans, to the tune of $5 billion. For now.
The IMF: US tax cuts and tariffs will come at a cost. The International Monetary Fund is projecting sharply slower economic growth in the US, largely due to Trump’s trade policies. Its pessimistic assessment warns that while the 2017 tax cuts will fuel the US economy for the next two years, growth will slide to 1.4 percent in 2023, half the Trump Administration’s 3 percent forecast. Moreover, “The negative impact [of a trade war] on the global economy would be serious,” noted IMF Managing Director Christine Lagarde.
India: The subcontinent joins the fight. In response to President Trump’s new tariffs on steel and aluminum imports, the Indian government will suspend trade concessions and raise import duties on 30 US products by up to 50 percent. This includes a 50 percent tariff increase on large motorcycles, a 25 percent tariff on apples, and 20 percent tariffs on almonds and walnuts. The total increase comes to $240 million, which the Indian government says is equal to the damage India will suffer under Trump’s tariff policy.
Meanwhile at home… SALT limit? No problem, for some. There’s a $10,000 limit on the federal deductibility of state and local tax payments. But Bloomberg reports that since the provision took effect, there’s been an uptick in “non-grantor trusts” that render the property tax deduction cap meaningless. For example: One owner of two homes in New York State can put his homes into limited liability company, then transfer the LLC’s interests into five non-grantor trusts set up in… Alaska. Each trust takes the maximum $10,000 deduction, allowing the taxpayer to deduct a total of $50,000 in property taxes from his federal taxable income.
The Johnson Amendment battle is on again. Conservatives are renewing their efforts to repeal federal curbs on the ability of churches to engage in explicit political activity. The House Appropriations Committee included language in its IRS spending bill limiting the agency’s ability to enforce the law. The IRS Commissioner would have to approve any investigations and the agency would have to notify Congress of any alleged violations. Tax Notes reports that Vice President Mike Pence told the Southern Baptist Conventions that, “we will not rest” until the law is repealed. He added that the Trump Administration would stop enforcing the law, even if it is not repealed. In fact, it has rarely been enforced.
Tax bills and hat-tricks: Timing is everything? In 2017, the Spanish government charged soccer star Cristiano Ronaldo with defrauding tax authorities of €14.8m. Ronaldo, who plays for Real Madrid in the Spanish professional league, denied the charges but offered to pay €14 million—a settlement Spain rejected. Late last week, Ronaldo said he’ll pay an €18.8 million fine (around $20 million) and accept a suspended jail term to settle the tax evasion charges. Then, Ronaldo scored a hat-trick for his home country of Portugal against Spain in the World Cup.
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