The Supreme Court is hearing a case, South Dakota v Wayfair Inc, that seeks to overturn an older precedent that prevents States from taxing businesses doing business in the State that don’t have a physical presence there. South Dakota is claiming that
…the 1992 precedent harms state treasuries and disadvantages taxpaying home-grown businesses.
That argument might hold water if the States were powerless. They’re not. There’s nothing at all preventing them from lowering the tax rates they impose on the brick-and-mortar and home-grown businesses resident in those States so they can compete. There’s nothing at all preventing the States from lowering their spending rates and thereby protecting their treasuries.
The hype is that the tax cuts enacted at the end of last year will lead to trillion dollar Federal government deficits.
On the other hand, there’s this bit about economic growth in the CBO’s report that also carried that deficit forecast [emphasis in the original].
- Last June, the CBO said GDP growth for 2018 would be just 2%. Now it figures growth will be 3.3%—a significant upward revision. It also boosted its forecast for 2019 from a meager 1.5% to a respectable 2.4%.
- [T]he CBO now expects GDP to be $6.1 trillion bigger by 2027 than it did before the tax cuts.
In a Wall Street Journal piece about Tennessee’s required closure of failing bridges problem, a Leake County Democrat supervisor, Joe Andy Helton, had this:
…he was frustrated by politicians being afraid to raise taxes—even to pay for basic services like roads and bridges.
“There’s only but one way to fix things on the local, state or federal level and that’s taxes,” he said.
Of course. Reallocating spending is utterly inconceivable to him.
The two bridges in Helton’s county that must be closed until repaired would cost, at most, a bit over a half-million dollars, together. That’s not pocket money for a rural county like Leake, but it’s not that much, either. County and State spending could be (re)directed toward the repairs.
Here’s a bit about income taxes, via Laura Saunders in Friday’s Wall Street Journal.
For 2018, households in the top 20% will have income of about $150,000 or more and 52% of total income, about the same as in 2017. But they will pay about 87% of income taxes, up from about 84% last year.
[T]he lower 60% of households, who have income up to about $86,000, receive about 27% of income. As a group, this tier will pay no net federal income tax in 2018 vs. 2% of it last year.
The thee major credit reporting firms, Experian, Equifax, and TransUnion, are moving to eliminate records of tax liens from their credit data and credit reports.
The three companies, which provide vital, behind-the-scenes services in consumer credit, have been grappling with class-action lawsuits over their handling of consumers’ tax liens and judgment information.
This is a mistake. The right answer is to defend, actively, those suits that are wrong, rather than to surrender to the extortion of lawfare, and to correct the mishandlings of the tax liens in their data and reports.
Now the European Commission wants to tax “behemoth” digitally-oriented multinational companies for doing business within the EU. The only companies that fit the EC’s definition of behemoth—large firms with annual worldwide revenue above €750 million ($922 million) and annual taxable EU revenues above €50 million ($61.5 million)—are American companies like Alphabet through its Google subsidiary, Apple, and Amazon.com.
That taxable EU revenue is key here.
The EU says these firms have exploited loopholes in tax laws and managed to lower their tax bills by shifting profits to low-tax jurisdictions within the EU such as Ireland and Luxembourg.
Recall Amazon.com’s playing off of several cities against each other in order to maximize the tax breaks and other returns that company might get for building its second headquarters in the “winning” city. Now we discover this in the offing:
US cities vying for Amazon.com Inc’s second headquarters risk facing an unexpected consequence to victory: other companies will demand the same hefty tax breaks conferred on the online retail giant.
How amazing is that? Other companies want in on the goodies.
I’m not shocked at that; I’m shocked that those cities’ managers didn’t see this coming. Their lack of anticipation speaks poorly of their ability to respond to those demands.
The European Commission has criticized seven member states for “aggressive” tax practices, whereby governments try to undercut others to attract multinational companies.
Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation, and Customs doesn’t like competition; he actually thinks it interferes with the “integrity of the European single market.”
[T]hese practices have “the potential to undermine the fairness and the level playing field in our internal market and they increase the burden on EU taxpayers.”
In a further demonstration that the Progressive-Democratic Party knows only how to tax and to raise taxes, there’s this.
Senate Democrats on Wednesday proposed repealing major pieces of the just-passed tax law, in a plan that would raise taxes on corporations, estates, and high-income households to pay for $1 trillion in new infrastructure spending.
And the Progressive-Democrats actually are touting this for the mid-term elections this fall. It’s not your money, after all, it’s Big Governments, and Progressive-Democrats Know Better how your money should be spent.
Can’t possibly pay for the infrastructure by cutting spending somewhere else. Mm, mm.
The Trump administration is looking at forcing online retailers to pay the same taxes that their brick-and-mortar competitors must pay.
The Trump administration on Monday urged the Supreme Court to expand states’ authority to collect sales tax on internet transactions, joining a chorus of state officials seeking to overrule a 1992 precedent exempting many online retailers from having to add taxes to a consumer’s final price.
This is a mistake.