Trump threatens tariffs over digital services taxes. President Trump threatened to impose a 100 percent tariff on goods from any country that adopts a digital services tax on US companies. Digital services taxes generally apply to large technology companies, including US-based firms such as Meta, Alphabet, and Amazon. Trump has argued that those taxes unfairly target American companies and previously threatened to cut off trade talks with Canada over a proposed digital services tax, which Ottawa later scrapped. CNBC notes that it is unclear what legal authority Trump would use to impose immediate country-specific tariffs, especially after the Supreme Court rejected his use of the International Emergency Economic Powers Act for broad reciprocal tariffs.
Newsom backs national billionaire tax. Gov. Gavin Newsom (D-CA) called for a nationwide tax on billionaires, while again opposing a state-level wealth tax that California voters will consider in November. Newsom said he supports a minimum tax on billionaires, closing tax breaks used by the ultra-wealthy, ending “buy, borrow, die” strategies, rewriting inheritance rules, and returning corporate tax rates to pre-2017 levels. Newsom argued that a California-only wealth tax could drive billionaires out of the state and should not be pursued state by state.
Ways and Means will examine sports tax policy tomorrow. The House Ways and Means Committee will hold a hearing Tuesday on federal tax policy and the multibillion-dollar sports industry. The hearing will examine how the tax code applies to the growing business of sports, including issues that may involve team ownership, stadium financing, media rights, athlete compensation, and related business activity.
TPC marks America’s 250th birthday. TPC’s Tracy Gordon and Aravind Boddupalli honor the occasion with ten tax facts to remember. The facts cover the relatively recent rise of the modern federal income tax, the importance of payroll taxes, the difference between owing no federal income tax and paying no taxes, the role of pass-through businesses, tax expenditures, child poverty reduction, tax literacy, state and local taxes, and the relatively low level of US tax revenues compared with peer countries. “Understanding tax policy,” they conclude, “empowers each of us to formulate new ideas, weigh tradeoffs, and participate in debates about what we want from our government and how much we are willing to contribute to it.”
Itemized: Fact of the Week. National economic trends can look very different across states and sectors, since state economies are moving at very different speeds. TPC’s State Economic Monitor shows that year-over-year state gross domestic product (GDP) growth in the first quarter of 2026 ranged from a 1.3 percent decline in the District of Columbia to a 3.7 percent increase in Kansas. Only two states saw year-over-year growth in government GDP: Michigan, at 0.1 percent, and Texas, at 1.3 percent. Retail GDP growth was also narrow, with only Arkansas and Texas posting year-over-year increases, both at 0.1 percent.
The Daily Deduction will next publish Monday, July 6, and resume its regular schedule on Monday, July 13.
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