Make it five
DRIP, DRIP, DRIP: Well, there’s another two years that Donald Trump didn’t pay any taxes.
POLITICO’s Shane Goldmacher, relying on New Jersey gambling records while Trump continues to keep his returns private, found out that it doesn’t look like Trump had any tax liability in 1991 or 1993. That means there’s now at least five reported years over the last four decades that Trump didn’t pay any taxes, counting also 1978 and 1979 (per The Washington Post) and 1984 (via the Daily Beast).
Story Continued Below
As Shane notes, the early 1990s, with its soft economy, wasn’t a great time to be a developer, and there’s nothing illegal about avoiding taxes because you lost money for the year. (Trump’s own camp had a rather pithy response when asked about the situation: “Welcome to the real estate business.”)
Still, it’s also pretty remarkable to be getting a $450,000-a-month allowance, as Trump was back then, and still not owe the Treasury anything at the end of the year. And the bigger picture, from Joe Thorndike of Tax Analysts, is that it’s a pretty big break from recent precedent that “we have to scratch around for these scraps of information when these sort of things should be in the public record.” More here: politico.pro/2011JCJ
IT’S A NEW WEEK. It’s also been about seven hours since LeBron. How about that.
Busy week, so let us know what to be looking for.
REMINDER: It’s the week you’ve been waiting for — the House GOP task force is expected to release its tax reform findings. Let’s see how spot on that pregame speculation has been.
ABOUT THOSE TREASURY RULES: There’s at least one tax-writing Democrat who’s open to business concerns about those broad proposed Section 385 regulations that Treasury is using to target earnings stripping — and that corporate America says will trip up a host of legitimate business deals.
Rep. John Larson of Connecticut, known as one of the more business-friendly Democrats on the House Ways and Means Committee, said that he largely favored the new rules. But he added: “In casting a broad net, businesses that have legitimate concerns are being caught up. We’ve heard from them, and said: ‘Look, give us the information in writing, so that we can digest it.’”
“If they’re unreasonable, let’s see what we can do about them,” Larson maintained. “Typically, what happens, if you can get a letter and you can make it bipartisan, you got a better shot.”
Still, the Connecticut Democrat said he hadn’t brought any concerns to Treasury yet, and Senate Democratic aides were quick last week to tamp down any notion that the department might be willing to delay the rules.
NOT DONE ON INVERSIONS: Senate Democratic tax writers are working on a broader package to battle offshore tax deals that should be released this summer, a top Finance Committee staffer said recently. “Some pieces of it are anti-inversion, other pieces are what I would describe as mini-reforms of the international system that might lessen the incentives to invert,” said Todd Metcalf, the chief Democratic tax counsel on the committee, per Bloomberg BNA. “Rather than sort of trying to slam the door shut, or build the wall, which seems to be the theme of this year.” Metcalf said the Democratic tax writers had already been working with the Joint Committee on Taxation on the package for months. Full BNA story: bit.ly/1tvItm9
** A Message from the International Council of Shopping Centers: Shopping centers are America’s marketplace, driving economic growth, and civic and social engagement. In the United States, one out of every 11 jobs is shopping center-related and, in 2015 alone, more than $147 billion in state sales tax revenue was generated by the shopping center industry. For more information visit www.icsc.org/advocacy. **
A RETHINK ON CORPORATE TAX REFORM: Eric Toder of the Urban-Brookings Tax Policy Center and Alan Viard of the American Enterprise Institute have found a framework that would allow the U.S. to drastically cut the corporate rate, from 35 percent all the way to 15 percent, in a revenue-neutral manner. (To be fair, an earlier draft from Toder and Viard got rid of the corporate tax entirely.)
How? Toder and Viard would tax shareholders, at ordinary income rates — and each year, whether they sold their investments or not. As Howard Gleckman from TPC explains, “Eric and Alan base their concept on one big idea: Because shareholders are relatively immobile, it is easier to tax corporate profits at the investor level than at the corporate level. Today, the U.S. bases taxes on the source of a firm’s income or its legal residence, two factors that can be easily manipulated by a company looking to minimize its tax bill.” More here: bit.ly/1W86GKH
SPEAKING OF TPC: The center’s Len Burman has some advice for Bernie Sanders — if you want to go for a full Scandinavian fiscal situation, you probably need to embrace a more regressive tax structure. Burman gives Sanders a thumb’s up for backing a carbon tax, but says the Vermont senator’s push to increase taxes on capital would likely lead to more tax evasion and shelters. “Swedes, Norwegians, and Danes know that the only plausible way to raise enough revenue to finance government spending that averages almost 50 percent of GDP is with a very efficient tax system,” Burman writes — including a rather regressive 25 percent value-added tax. (Recall that Sanders opposed Philadelphia’s efforts to enact a soda tax because it was regressive.) tpc.io/1PBhFWk
SMELLS LIKE PROGRESS: The European Union is almost there on an agreement to target tax dodgers, according to Bjarke Smith-Meyer, our colleague in Brussels. It hasn’t been easy — the Czech Republic almost derailed the deal over concerns about VAT fraud, and Austria, Belgium, Lithuania, Malta, Slovenia, and Spain all had issues with a proposal on interest limitation rules. But the Czech Republic signed off after the European Commission said it would roll out a VAT measure next month. And now, it looks like a deal can be introduced on Tuesday — as long as all stays quiet today. More out of Belgium: politi.co/21uhXVn
BUT NOT EVERYWHERE: European efforts to push through a financial transactions tax aren’t going quite as well, at least if you believe the German finance minister. Wolfgang Schaeuble praised a new proposal as a “small step” in the right direction, as Bloomberg reports, but doesn’t sound particularly optimistic that a deal among 10 interested countries can come together. A final decision will have to come in September, after a task force examines two technical issues. Chances to get an EU-wide transactions tax — in all 28 countries — has already faded. Bloomberg story: bloom.bg/1Sd4P0i
GAZA FEELS THE SQUEEZE: Hamas, which is getting less assistance these days from Iran and the Muslim Brotherhood, is hiking taxes in Gaza, the BBC reports. In fact, Gazans owe taxes to three separate entities — Israel, the Palestinian Authority and Hamas. The recent tax hikes from Hamas have increased the prices on cigarettes by 35 percent and cars by 25 percent, just since March. bbc.in/1WXLHv8
CALI V. KANSAS: Over at The Washington Post’s Wonkblog, Jim Tankersley and Max Ehrenfreund point out that California tied for the highest economic growth among states last year — after voters there agreed to hike taxes on the wealthy. On the other hand, Kansas — whose supply-side inspired tax cuts have been more than closely watched by tax wonks — only grew at a 0.2 percent rate. “Now, correlation does not, as they say, equal causation, and two examples are but a small sample. But the divergent experiences of California and Kansas run counter to a popular view, particularly among conservative economists, that tax cuts tend to supercharge growth and tax increases chill it.” wapo.st/1rwdGUX
GETTING TOWARD EMPTY: North Dakota had a rainy-day fund with well over a half billion dollars in January. But now, as the Associated Press notes, that fund is about to run dry because tax collections are falling short of projections because of falling oil and commodity prices. “In February, faced with a $1.1 billion shortfall, Gov. Jack Dalrymple ordered a 4.05 percent cut to government agencies and a $497 million raid on the rainy-day fund. But state budget officials said this week that collections continue to fall and almost all of the fund’s current $75 million balance will be needed to cover the additional shortfall.” More from the AP: bit.ly/1Y3ujpI
India’s economic quandary. on.wsj.com/1UiZnk4
New York lawmakers back daily fantasy sports. reut.rs/1Ur87Bs
London’s housing market is sputtering. bloom.bg/24ZW8O2
DID YOU KNOW?
According to the Bible, Samson — the hero who loses his powers when his hair is cut by Delilah — died in Gaza.
** A Message from the International Council of Shopping Centers: Shopping centers are located in every community across the U.S. They are the backbone of the economy and support 12.5 million jobs, $23.9 billion in property tax revenue, and $140.5 billion in sales tax revenue—funds that support efforts to revitalize communities, helping to keep them vibrant and drawing people to live, work and shop. They are more than just retail hubs—they drive growth, as well as civil and social engagement.
Founded in 1957, ICSC is the global trade association of the shopping center industry. Its more than 70,000 members in over 100 countries include shopping center owners, developers, managers, investors, retailers, brokers, academics, and public officials. Learn more at www.icsc.org/advocacy. **