What do the budget crisis in Louisiana and Ikea have in common? Taxes
There鈥檚 a 鈥渉ot mess鈥� of a budget crisis in Louisiana.听The legislature began an emergency session over the weekend. Lawmakers need to听听by June 30, and Democratic Governor John Bel Edwards recommended tax increases totaling $836 million to help get there. In a听 televised address late last week, he warned that without tax hikes, the state might have to cut medical听 services, education, and even鈥� college football. Once the legislature fills this year鈥檚 fiscal hole, it must turn to the projected听 $2 billion shortfall for next fiscal year, which starts on July 1.
Did Ikea evade $1.1 billion in taxes?听The European Union鈥檚 Green Party听exactly that between 2009 and 2014. The European Commission plans to review the Green Party鈥檚 claim that the furniture giant shifted profits from its European locations through a subsidiary in the Netherlands.听听鈥淲e pay our taxes in full compliance with national and international tax rules and regulations.鈥�
Speaking of international taxation鈥μ�House Ways & Means Chair Kevin Brady told the听 Tax Council Policy Institute that he鈥檚 encouraged by what Treasury Secretary Jack Lew told the panel about addressing corporate inversions.听Tax Analysts听听that Brady wants Ways & Means to draft both international tax reform legislation and a blueprint for comprehensive reform this year. Would they add to the debt, a non-starter for the White House? 鈥淩eal-world budget scoring that recognizes the growth aspects of tax reform is the responsible path,鈥� Brady said.
And on the campaign trail鈥ernie Sanders doubles-down on his 鈥渟peculation tax.鈥澨�The Democratic hopeful touted his听听of 0.5 percent for stocks and 0.1 percent for bonds to help pay for universal college education and health care. TPC鈥檚 Len听听the likely mixed effects of such a levy. "On the one hand, it will raise the cost of investment鈥� On the other hand, to the extent that it discourages unproductive trading鈥� that鈥檚 a good thing for the economy.鈥�
While some GOP hopefuls defended their tax cuts during Saturday night鈥檚 debate.听Ted Cruz insisted听 that his business flat tax is not a Value Added Tax鈥攚hich conservatives don鈥檛 like鈥攂ecause his proposal is not a sales tax. But听. Marco Rubio had to explain why he wants to听. He said that if business can deduct costs of equipment, parents should get a credit for the investment they make raising their children.听听Bush: He dismissed concerns about his plan to tax hedge fund managers鈥� income as ordinary income instead of at the lower capital gains rate: 鈥淚t鈥檚 not the end of the world.鈥�
The CRFB has a quick take on Donald Trump鈥檚 tax plan.听The Committee for a Responsible Federal Budget has a听听on the GOP presidential contender鈥檚 tax proposals. In a nutshell, he鈥檇 鈥渁dd between听$11.7 and $15.1 trillion听to the debt over the next 10 years, including interest鈥� [D]ebt would grow from 75 percent of Gross Domestic Product today to as听high as 140 percent听by 2026.鈥� Even if his plans lead to significant economic growth, the debt would still rise to 115 percent of GDP. Much like听, CRFB concluded that Trump would need to find deep spending cuts to offset those tax reductions.
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