Banks continue to enjoy windfall under Tax Cuts and Jobs Act. The nation’s top six banks lowered their reported tax liability by $18 billion in 2019, topping their 2018 savings of $14.5 billion. Their average effective tax rates, as reported on financial statements, fell to 18 percent, down from 30 percent prior to the TCJA, according to calculations by Bloomberg News. Over the past two years, bank lending has slowed and banks have reduced their workforce by 1,200.
In Tennessee: A two-month food tax holiday? A state lawmaker would give shoppers a June and July holiday from the 4 percent sales tax on food. Republican Rep. Patsy Hazelwood’s plan would reduce revenues by about $100 million in 2020. She says she wants all Tennesseans to benefit from the state’s economic success.
State and local governments have a role to play in reducing the wealth gap. While national efforts to reduce inequality have gotten the lion’s share of the attention, TPC’s Donnie Charleston writes that since wealth inequality differs geographically, state and local governments have a role to play as well. Their tools include incentives to build home equity, corrections to wage inequity, financing college education, and taxing inherited wealth.
Tariff troubles or a trigger? Germany’s government has confirmed that the US threatened tariffs on European cars if Germany, France and the United Kingdom did not trigger a dispute resolution mechanism under the Iran nuclear accord. It also says that the US threat had nothing to do with the countries’ launch of the mechanism.
Opting out of global digital tax rules? Not likely, says OECD. The Organization for Economic and Cooperative Development is working to reach agreement among 140 countries on how to tax the digital economy. The US has proposed making parts of the plan optional, but Pascal Saint-Ammans, director of the OECD’s Center for Tax Policy and Administration, told Bloomberg Tax that the US proposal “is still on the table and it’s acting as a barrier to discussions,” and “will not fly politically.”
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