Lunch Links: Mnuchin Promises Tax Reform within First 90 Days of Trump Administration; Chopping Itemized Deductions Not Panacea in Trump Tax Plan; Massachusetts Latest State to Consider Soda Tax

December 1, 2016

Today is December 1, the date in 1867 when the U.S. Supreme Court decided Crandall v. Nevada, ruling that states cannot impose a tax on leaving the state. Nevada had imposed a $1 exit tax on all people leaving the state by railroad, stagecoach, or other vehicle. Crandall, who ran a stagecoach company, refused to collect the tax from his passengers, arguing it was void under the Constitution. The Supreme Court of Nevada upheld the tax and Crandall appealed, although interestingly, neither Crandall nor a lawyer for him showed up to argue before the Court or even filed a brief in the case.

The Court, in an opinion by Justice Samuel Miller, rejected the state’s argument that the tax was merely a business tax and not a tax on people leaving the state; Miller wrote that the law wasn’t even written that way, although even if it was, what mattered was the effect of the tax, not the words used. The Court went on to conclude that an unenumerated right to travel to anywhere in the United States was vital to individual rights and to sustaining one common country. A state tax designed to impede this right is unconstitutional. Justice Nathan Clifford and Chief Justice Salmon Chase concurred separately, saying they would have held the law violated the Commerce Clause of the federal Constitution rather than an unenumerated right to travel.

Here are some interesting links I came across:

More on Tax Reform Priority: Treasury Secretary-designate Steven Mnuchin says tax reform will be “something that happens absolutely within the first 90 days of this presidency.” There’s more talk on border adjustability being a component of a tax reform package, to tackle both tax reform and trade reform goals. (Reuters)

Neal and Becerra Seek Dem Role on Ways and Means: House Ways and Means ranking Democrat Sander Levin (MI) has stepped aside, and competing to replace him are Reps. Xavier Becerra (CA) and Richard Neal (MA). Becerra says he’s a fighter who will take on Trump; Neal says he knows policy better. BREAKING: Becerra has been nominated Attorney General of California, presumably putting Neal in the post. (Politico / Los Angeles Times)

2017 U.S. House Calendar Released: Representatives will be in session much more in 2017, with a number of Fridays and five-day weeks. (U.S. House Majority Leader)

Construction Stocks Soar on Infrastructure Package Talks, But…: The Wall Street Journal notes that the Trump infrastructure plan is focused more on how to finance $1 trillion rather than how to fund $1 trillion, by assuming that projects will generate revenue over expenses over the long term. That’s not the case generally with transportation, to use just one example, with federal expenses exceeding revenue and a mixed record on franchised projects. (The Wall Street Journal)

Deduction Limits Pose Test for Donald Trump’s Tax Plan: Also in the WSJ, Richard Rubin responds to talk about Trump’s tax plan being a wash for high-income individuals because it takes away their deductions by noting that Trump’s plan to cap deductions at $100,000 per taxpayer ($200,000 per couple) would raise taxes by $559 billion over a decade, but the other tax cuts (especially a much lower tax rate on business-related income) would be worth trillions. Mortgage interest and charitable deductions, despite being politically popular and untouchable, aren’t used by the vast majority (more than 70 percent) of taxpayers. (The Wall Street Journal)

More on Carrier: President-elect Trump is speaking in Indiana today on the deal. Meanwhile, former presidential rival Sen. Bernie Sanders now says “[e]ven corporations that weren’t thinking of offshoring jobs will most probably be re-evaluating their stance this morning.” (Twitter / The Washington Post)

Massachusetts to Consider Statewide Soda Tax: A number of cities around the country have passed soda taxes recently, but Massachusetts Rep. Ray Khan (D) wants a state-level soda tax. (WBUR)

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