Tax Justice Digest: The Problems with a Border Adjustment Tax

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. 

Regressive and Loophole-Ridden: Issues with the House GOP Border Adjustment Tax Proposal
In recent weeks, the Republican congressional leadership’s effort to introduce a comprehensive tax reform bill has increasingly faced opposition from major business groups and skeptical lawmakers from across the aisle. The primary source of dissent thus far is that the most prominent tax framework, the House GOP’s “Better Way” tax blueprint, contains a radical provision to apply a border adjustment to pay for a cut in the corporate income tax rate from 35 to 20 percent. A new report from the Institute on Taxation and Economic Policy (ITEP) finds that this border adjustment tax would be regressive and loophole-ridden and would likely violate international trade agreements.
Read the Report
Read the Summary Blog Post

Private School Tax Subsidies Blur the Line Between Charitable Gift and Money Laundering
When is a charitable contribution not a “donation” at all? If a taxpayer manages to turn a profit on the deal, has anything altruistic actually occurred? The clear answer is no. But an ITEP report reveals that the federal government does not always agree, at least with regard to certain gifts to private K-12 scholarship funds. Released late last year, the report’s findings may gain renewed public interest because the newly confirmed Education Secretary, Betsy DeVos, is a proponent of using public dollars for private school education and President Trump, according to reports, is considering a policy that would funnel federal dollars to private schools via federal income tax credits.
Read the Report
Read the Updated Blog Post

What to Watch in the States: Modernizing Sales Taxes for a 21st Century Economy
State lawmakers often find themselves looking for ways to raise revenue to fund vital public services, fill budget gaps, or pay for the elimination or weakening of progressive taxes. Lately, that search has led many states to consider reforming or expanding their sales taxes.
Read the Blog Post

Why, West Virginia, Why?
A recently introduced Senate Bill in West Virginia (SB 335) would ultimately eliminate the state’s personal and corporate income taxes, do away with the sales and use tax, and reduce the state’s severance tax. Under the plan, the revenue lost from this assortment of diverse taxes would be replaced by an 8 percent broad-based general consumption tax. The result: low- and middle-income West Virginians pay more, much more, while wealthy residents heavily benefit.
Read the Blog Post

‘IMPROVE’ Act Fails to Improve Tennessee’s Regressive Tax Code
Tennessee Gov. Bill Haslam’s proposal (dubbed the IMPROVE Act) to raise the state’s gas tax while cutting three other taxes would essentially be a tax cut for the state’s wealthiest residents and a tax increase for the lowest-income Tennesseans.
Read the Blog Post

ITEP State Rundown: Regressive Tax Proposals Multiplying
This week saw a nearly successful attempt to right the fiscal ship in Kansas; regressive tax proposals introduced in West Virginia, Georgia, and Missouri; ongoing gas tax fights in Indiana, South Carolina, and Tennessee; and further tax and budget wrangling in Illinois, New Mexico, Oklahoma, and beyond.
Read the full Rundown
 

If you have any feedback on the Digest or tax stories you’re watching that we should check out too please email me rphillips@itep.org

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