The great supply-side experiment is over. After years of cratering revenues and hard choices about spending cuts, the Republican-controlled Legislature has pulled the plug on Republican Gov. Sam Brownback’s 2012 tax program. Both the Kansas House and Senate overrode Brownback’s veto June 6 by wide majorities. Already commentators are rushing to declare all tax cuts obsolete as a result of Kansas’s experience, but that would be a gross overreaction to what actually happened.
Tax Analysts Blog
The federal gas tax turns 85 today – pretty respectable for an excise but nothing compared with federal levies on alcohol and tobacco, which first appeared in 1789.
The Congressional Budget Office released its updated analysis of the American Health Care Act (AHCA), giving Democrats new ammunition to attack the bill and making some Republicans even more nervous about the consequences of healthcare reform in the 2018 midterm elections. But given what the CBO said about the bill, it’s clear that very little has changed since the first report in March.
For most of the year, Republicans have said that passing healthcare reform and presidential involvement in the process could make tax reform much easier. In the last two weeks, President Trump released a tax plan and the House passed a repeal-and-replace bill by a narrow margin. Unfortunately, it’s not all that clear that either of these events will actually help the GOP accomplish anything on taxes.
As the House Republican blueprint's destination-based cash flow tax comes under increasing attack from retailers and opponents, the GOP and other would-be tax reformers are looking at other options. And it probably shouldn't be shocking that a federal VAT is among the choices to potentially replace the corporate tax in any major tax reform effort.
Taxpaying is a civic ritual. The annual ceremony -- gathering records, completing returns, rushing to the post office -- has been diluted in recent years, especially by the rise of electronic filing. But April 15 remains a national anti-holiday of sorts. It may not be fun, but it's a touchstone of American citizenship.
Election-year pandering is conducive to myopic tax proposals. That’s evident right now in France, which will hold its first round of national elections on April 23. Three of the tax ideas being put forward are worthy of further discussion. Spoiler alert: I don’t care for any of them.
How does a country go from being the world leader in bank secrecy to a leader in openness and transparency in nine years? That’s a complicated question with a number of acceptable answers. Let’s look at a few.
Some mysteries are better left unresolved. Did FDR know in advance about Pearl Harbor? Did Lee Harvey Oswald act alone? Was Tony Soprano bumped off in that Jersey diner? We’ll never know. The tax community is fixated on a mystery of its own, and it’s a genuine cliffhanger.
I’ve previously opined that Treasury Secretary Steven Mnuchin, whatever his other talents, is not a tax guy. That was in the context of his bizarre utterance on reciprocal taxation. (The jury is still out as to whether he was referring to an origin-based VAT or a retaliatory tariff regime disguised as a corporate tax. Neither is good policy.) The latest statement from Mnuchin, that he thinks tax reform will be easier than healthcare, is equally dubious. He made the comment March 24 at a policy forum in Washington hosted by Axios Media :