Outlooks, deficits, breaks and moves
CBO released its ten-year budget and economic outlook.聽罢丑别听聽estimates that the federal budget deficit in 2016 will reach $544 billion and the public debt will rise to 76 percent of Gross Domestic Product. Two reasons for the increase in the deficits: slowdowns in payroll tax and corporate tax receipts. CBO projects that while short-term economic growth will be solid, subsequent years will see a slowdown. CBO Director Keith Hall will discuss the report before the聽聽this morning.
Will West Virginia balance its budget?聽罢丑别听聽for the third consecutive year, due in large part to declines in both coal production and natural gas prices. In his 2017 budget, Democratic Governor Earl Ray Tomblin would pay off the state鈥檚 workers鈥� compensation debt early and cut the state鈥檚 severance tax. He鈥檇 also increase taxes on tobacco products and telecommunications. He can expect push-back from the Republican-led legislature.
In Massachusetts, Governor Charles Baker wants to swap a film credit for a business tax break.聽The Republican聽聽and use the聽 $43 million in savings to pay for more affordable housing and a tax cut on Bay State businesses that sell out-of-state. But over five years, according to his administration鈥檚 projections, the proposal would cost more than twice the amount of savings.
Another day, another inversion.聽Johnson Controls, an auto supplier currently based in Milwaukee, Wisconsin, will buy Tyco International, based in Ireland. An Irish聽聽will save the new company about $150 million a year.
And abroad, a different move might not save much after all.聽British bank HSBC might relocate to Hong Kong to get away from the聽, soon to be 26 percent. But the bank might have difficulty moving enough profit to benefit from Hong Kong鈥檚 16.5 percent聽 rate. Moreover, Hong Kong isn鈥檛 as generous in the way it treats share bonuses, which could cost HSBC millions of dollars in annual tax deductions.
This article first appeared at .
