Lunch Links: IRS Regs Could Change in Trump Administration; New Jersey’s Bond Rating Lowered Again; Illinois Shortfall Worse Than Expected; Politico Forum Upcoming on Tax Reform
November 15, 2016
Today is November 15, the date in 1777 when the Articles of Confederation were approved by the Second Continental Congress and sent to the states for ratification. The Articles governed the United States from 1781 until 1788, when they were replaced by the U.S. Constitution. One major reason for the replacement was taxes: the Articles required that taxes to fund the central government “be laid and levied by the authority and direction of the legislatures of the several States…” States neglected to make their payments, leaving the central government short on cash and overly dependent on some states. States also engaged in trade wars with each other, imposing tariffs and taxes on goods moving around the country. The U.S. Constitution allowed the central government to impose direct and indirect taxes, and to prohibit state taxation of interstate commerce.
Here are some interesting links I came across:
Taxes and the Presidential Salary: Donald Trump says he wants to refuse his $400,000 presidential salary, but he may not have a choice since it’s set by law. George Washington tried to refuse his $25,000 a year salary but was paid anyways. John Kennedy and Herbert Hoover chose to donate their presidential salary to charity. If Trump does that, he can take the tax deduction but would still owe some tax if he’s in a high tax bracket. (Forbes)
New Administration Will Have Broad Power to Change IRS Regulations: The IRS has long refused to abide by the Administrative Procedure Act, claiming it doesn’t have to hear public comment on regulations because it is merely interpreting what Congress has enacted. But this stance also means that IRS regulations can be reversed or rewritten very quickly, compared to other agencies, if the Trump Administration wants to. (Yale Journal on Regulation)
New Jersey Downgraded Again: S&P lowered the state’s bond rating from A to A-, citing the state’s underfunded pension system and recent decision to cut taxes a net $1 billion while raising the gasoline tax. New Jersey is the second worst-rated state, after Illinois. (The Record)
Illinois Short $450 Million for Current Fiscal Year: State revenues are weaker than expected. (Illinois News Network)
State & Local Public Officials of the Year: Governing honors Massachusetts Governor Charlie Baker, Seattle County Executive Dow Constantine, Utah OMB Director Kristen Cox, Denver Mayor Michael Hancock, Miami Judge Steven Leifman, Atlanta MARTA CEO Keith Parker, South Dakota Senator Deb Peters, and San Diego Housing Director Nick Macchione. (Governing)
Also, tomorrow, Rep. Peter Roskam (R-IL), EY’s (formerly Ernst & Young's) Cathy Koch, and Trump advisor Steve Moore talk tax reform at a Politico forum.