A trade war could hit many pockets. European Union Commissioner for Trade Cecilia Malmström said that the EU is drafting a list of US goods--including Levi's jeans--that could face a new 25 percent import tax if President Trump proceeds with his plan to impose tariffs on European steel and aluminum. She indicated that the EU would also lodge a complaint about his plan with the World Trade Organization. The EU perspective, in other words: Retaliate, but not escalate.
Some countries might be exempt. President Trump has suggested that Mexico and Canada could be exempt from tariffs on aluminum and steel if a renegotiated NAFTA deal better serves US interests.
House Speaker Ryan weighs in… against Trump. AshLee Strong, spokesperson for Ryan, said “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan. The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.” For now, the president says he is “not backing down,” asserting, “I don’t think you’re going to have a trade war.”
How to close the tax gap. TPC’s Devin Gould explains that from 2008 through 2010, taxpayers owed but did not pay an average of $458 billion annually in federal taxes. The IRS was able to collect about $50 billion of the annual tax gap through its enforcement efforts. Gould shows how the agency “might have more success cracking down on tax fraud and evasion if it could use a tool that is available to other parts of the federal government and to some state revenue authorities but not to the IRS—applying the False Claims Act to tax cases.”
Wisconsin’s largest utilities join list of companies that benefit from the Tax Cuts and Jobs Act. They say they’ll save millions of dollars in the near term and hundreds of millions of dollars long term thanks to the TCJA. The questions remain: Will the tax savings be passed on to lower rates for consumers, and if so, how much?
No budget deal in Louisiana. The state legislature failed to pass a sales tax bill for a second time and has as yet made no progress in closing a $994 million budget gap expected on July 1. At this point, the state Senate would have to suspend several rules in order to get any bills through the legislative process. State spending remains vulnerable to steep cuts this summer. GOP House Speaker Taylor Barras said, “I think we are at a turning point in the debate as it relates to revenue verses expenditures. This could be a debate that might last a little longer than we think."
Tune in tomorrow to learn about wealth, taxation, entrepreneurship and philanthropy with TPC. You can watch the live webcast of panel presentations on wealth, taxation, entrepreneurship and philanthropy. The event, moderated by TPC’s Len Burman, starts at 9:00 am, and features Jenny Bourne of Carleton College; Shena Ashley of the Urban Institute’s Center on Nonprofits and Philanthropy, and TPC’s Gene Steuerle and Rob McClelland.
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.
