Trump tax plan 2.0 by convention?
AS THE TAX PLAN TURNS: You think Donald Trump’s staffing situation is the only soap opera in his campaign? Don’t forget about his tax plan.
Stephen Moore, the Heritage Foundation economist and prominent supply-sider, told Morning Tax on Monday that he fully expects Trump to release a revised tax plan before next month’s GOP convention in Cleveland. “I don’t know whether it’s going to be one week or two weeks or three weeks,” Moore said, adding that Trump seemed “very enthusiastic about the suggestions.”
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“I think the political team has to sign off on everything, but I think it’s safe to say that there’ll be a new revised plan,” said Moore, who joined other conservative thinkers and business leaders at a meeting with Trump this month.
Recall: Moore and CNBC’s Larry Kudlow already edited Trump’s tax plan — cutting the cost from roughly $10 trillion to $3.8 trillion over a decade. Trump’s team then told The New York Times that he wasn’t changing his plan. (Bloomberg first reported the meeting that Moore attended with Trump and others.)
Now, Moore says Trump is interested even though he and Kudlow haven’t made many tweaks to their original suggestions — the same suggestions that the Tax Foundation said would basically erase the plan’s direct assistance to middle-income families. At the same time, Moore said Trump has stressed that the plan has to help the middle-class. (Moore has said that tax rate cuts for everyone will be a big boost to working families.)
So we’ll have to see how this all works itself out. Trump’s campaign, which had something of a busy day Monday, didn’t respond to a request for comment.
THIS IS WHAT TUESDAY LOOKS LIKE. It’s also the seventh anniversary of Greenland — it of some 836,000 square miles, roughly 56,000 people and a couple of stoplights — officially starting self-governance. (A high of 59 degrees today in Nuuk, for those of you interested in visiting.)
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MOODY’S=NOT CONVINCED: The bond rating company dove into Trump’s fiscal plans, and found they would leave the economy significantly weaker — in fact, probably hurtling the country toward a long recession. Mark Zandi and his co-authors found that Trump would combine little in the way of spending restraint with his large tax cuts and a lot more federal debt, not to mention less economic growth and direct foreign investment.
Moody’s also wasn’t really convinced that Trump’s ideas would be much assistance to the middle class, as POLITICO’s Nolan McCaskill reports. “Everyone receives a tax cut under his proposals, but the bulk of the cuts would go to those at the very top of the income distribution, and the job losses resulting from his other policies would likely hit lower- and middle-income households the hardest,” the Moody’s report said. “The decline in wealth caused by weaker stock prices and housing values would be felt by all households.” Trump’s camp didn’t comment on the report, but Moore did in his interview with Morning Tax: “It was a classic hit job,” he said. “I just don’t think there was a lot of accuracy in that report.” Nolan’s story: http://politi.co/28IsJqF Full report: bit.ly/28KX5bn
THAT’S DEFINITELY SHORT-TERM: House leaders are considering bringing up a two-month extension of the FAA this week, the Pro Transpo team’s Jennifer Scholtes reports. That would give the House and the Senate until Sept. 17 to hash out the long-term FAA plan that’s been eluding them this year. But there’s only so much good news in there for advocates trying to tack energy tax provisions on to an FAA bill: Because of all the recess days in Washington this summer, lawmakers would only be at the Capitol for about two weeks of those two months. politico.pro/28KbKSU
Our friends over at Morning Transportation have a lot more on this situation, for those interested. Long story short: Senate Commerce Chairman John Thune (R-S.D.) and House Transportation Chairman Bill Shuster (R-Pa.) are scheduled to meet this week, but some sort of stopgap seems likely. But there’s still a chance that an extension could push into 2017, taking a potential tax vehicle for this year off the table.
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ONE LAST TRUMP ITEM: Promise. The Wall Street Journal’s Richard Rubin reports that New York City — at Trump’s request — took away a property tax break that’s only supposed to go to those making less than a half-million dollars a year, tacking just over $1,000 more onto his tax bill. What the city wouldn’t say is whether Trump was actually eligible for that incentive. But while Trump hasn’t released his tax returns yet, several different reports have found that the real estate magnate had at least five years with net losses — and thus no tax liability. (Still, as the WSJ also notes, Trump has been claiming all sorts of charitable deductions on land in recent years, which wouldn’t make a ton of sense if he didn’t have any tax liability.) on.wsj.com/28KiXSX
WHAT’S AFTER SUGAR? Yes, what else might public health advocates want to tax, following their recent soda tax success in Philadelphia? How about salt, the Tax Policy Center’s Howard Gleckman says, via CBS News. A salt tax isn’t coming to American shores anytime soon, Gleckman notes, but Hungary already has one and New Zealand is considering the idea. Lori Roman of the Salt Institute, on the other hand, is about as enamored with the idea as you might expect: “It would be among the worst policies that I ever could imagine to tax something that people must have to live.” cbsn.ws/28KCq6n
INTERNATIONAL UPDATE —
WHITHER BREXIT: British voters will decide Thursday whether the U.K. should ditch the European Union — and Reuters reports that the “remain” faction has a slight lead in the most recent polling.
It’s tough to say just how complicated a British exit from the EU might be. But Bloomberg BNA looks at one particular tax wrinkle for companies — dealing with the U.K. value-added tax as London transitions out. “VAT matters are expected to become more complex because VAT is a fully harmonized tax in the U.K. governed by EU VAT directives and regulations, as well as decisions from the Court of Justice of the European Union, whose decisions would also immediately cease to be binding from the date of secession.” bit.ly/28JPoyM
SUPREME COURT SIDES WITH RJR: In a rare 4-3 decision, the high court found that the European Union couldn’t sue R.J. Reynolds under a federal racketeering statute. The EU said RJR Nabisco played a central role in a giant cigarette smuggling scheme that kept much needed revenue away from the union. Or, as Justice Samuel Alito put it: “The complaint alleges a scheme in which Colombian and Russian drug traffickers smuggled narcotics into Europe and sold the drugs for euros that — through a series of transactions involving black-market money brokers, cigarette importers and wholesalers — were used to pay for large shipments of RJR cigarettes into Europe.” New York Times story: nyti.ms/28JabDq
GERMANY GOES POPULIST: Berlin is moving to toughen corporate succession rules that critics say have allowed Germany’s wealthiest families to avoid inheritance taxes for years, The Wall Street Journal reports. “The near-blanket exemption from inheritance taxes for corporate successions has helped make Europe’s largest economy home to some of the world’s oldest and wealthiest corporate dynasties and some of the most tightly held businesses in the world.”
German officials want to get the changes, which would basically only allow smaller or troubled companies to escape inheritance taxes, enacted by July 8. Business advocates said the changes would make life difficult for a lot of companies. on.wsj.com/28JSx6I
STATE NEWS —
THE JERSEY GAS TAX: A bipartisan group of New Jersey lawmakers are pushing legislation to hike the state’s rather low gas tax by almost a quarter a gallon — 23 cents, to be exact. (The legislation doesn’t appear to allow you to pump your own gas in the state, a hold-out against self-service.)
The bill would trade the gas tax hike for scrapping the estate tax, a larger exemption for retirement income, a hike in the Earned Income Tax Credit and a tax break for charitable donations. NJ.com: bit.ly/28JyMH5
— Presidents don’t really have that much control over the economy. nyti.ms/28KbO7q
— Mayor Jim Kenney signs Philadelphia’s new soda tax into law. politico.pro/28JS03P
DID YOU KNOW?
The Northeast Greenland National Park is the largest national park in the world, at around 375,000 square miles — taking up around 45 percent of Greenland, and coming in around 77 times bigger than Yellowstone National Park. bit.ly/28NfNw3
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