In the Tax Justice Digest we recap the latest reports, blog posts, and analyses from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Here’s a rundown of what we’ve been working on lately.
About President-Elect Trump and Carrier Corp.’s 1,000-Jobs Deal
Where to start with this Carrier Corp. deal? Over a 15-year period, Carrier’s parent company paid an average 10 percent effective federal tax rate: that’s less than one-third of the statutory rate. To boot, the company likely is avoiding taxes on a $29 billion offshore cash hoard. In spite of this, the incoming Trump Administration has decided more tax breaks are a fair ransom for the company’s paper-thin promise to keep 1,000 jobs in the United States. ITEP Senior Fellow Matthew Gardner wrote two recent blog posts about this corporate claptrap.
To learn more about how tax incentives for corporations primarily help corporations and their shareholders, read Tax Incentives: Costly for States, Drag on the Nation
Tax Cuts for the Rich Are the Main Feature, Not a Bug, of the Trump Tax Plan
Incoming Treasury Secretary Steven Mnuchin made waves this week with his announcement that the tax plan proposed by his boss, President-elect Donald Trump, will not cut taxes for the wealthy, promising “no absolute tax cut” for upper-income families. This statement flies in the face of every available analysis of Trump’s tax plan. Read Matt’s blog diving deeper into the details of Mnuchin’s statement and Trump’s tax proposals.
Taxing $2.5 Billion in Offshore Profits: What’s Ahead for Repatriation?
Multinational companies collectively are hoarding $2.5 trillion in profits offshore and avoiding up to $718 billion in U.S. taxes. Lawmakers on both sides of the aisle as well as the incoming Trump Administration view this offshore cash as low-hanging, revenue-producing fruit, and it is likely that lawmakers will come up with a plan this year to incentivize companies to “repatriate” this cash. Problem is that the proposals likely to gain traction are ill-advised, patchwork fixes. Read ITEP analyst Richard Phillips’ blog on repatriation, or if you have a few more minutes, read ITEP’s comprehensive guide to repatriation proposals.
We Count at Least Nine Problems with Trump’s Infrastructure Proposal
In theory, expanded investments in our nation’s infrastructure could generate wide support among the public and within Congress. Yet congressional negotiations on this issue have repeatedly broken down because of disagreements over how to fund those investments. Unfortunately, a flawed proposal for new funding put forth by President-elect Trump fails to offer a realistic path forward. Read ITEP’s new issue brief, Privatization, Waste, and Unfunded Projects: The Problems with Trump’s Infrastructure Proposal or read ITEP research director Carl Davis’s blog for a brief summary.
What Will Tax Reform Ultimately Look Like?
With something called “tax reform” moving full steam ahead in Congress, it not yet clear what exactly lawmakers mean by tax reform. Lawmakers are still struggling over fundamental questions such as whether tax reform should be revenue neutral and bipartisan, and what the international tax system should look like. Read our blog exploring how these critical decisions might play out.
STATE TAX NEWS
State Tax Breaks for the Elderly Primarily Benefit the Wealthy, Drain State Coffers
No one wants to be poor in their golden years, and this is a likely reason that state tax breaks for the elderly are popular in multiple states. But an updated ITEP research brief finds that all too often, tax breaks for the elderly are poorly targeted and primarily benefit wealthier taxpayers. Read ITEP analyst Aidan Davis’s blog summarizing the brief.
The Road Ahead for State Tax Policy in 2017
While state and local elections didn’t receive as much national media attention as the presidential race, shakeups in statehouses will pave the way for significant tax policy debates in a number of states. In a recent piece, ITEP staff outlines states to watch in 2017
State Rundown: Figuring out How to Fund Roads, Millionaire’s Tax, Etc.
This week’s State Rundown features news about transportation and infrastructure funding in Indiana, California, and South Carolina, next steps for New York's millionaire's tax, moves toward comprehensive tax expenditure review in Ohio, continuation of the income tax reciprocity agreement between New Jersey and Pennsylvania, and efforts for tax change in Nebraska and Arkansas.
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