A Quid Pro Quo Of Another Sort

Taxes

No surprise, really: President Trump may sign a spending deal, if …. Defense News reports on the prediction from White House legislative affairs director Eric Ueland. He told reporters that Trump would sign a stopgap spending bill to fund the government through December 31 if it does not restrict his ability to build a wall on the southern border. Right now, the federal government  will run out of money  on November 22. GOP Senate leaders are floating two dates for the next possible stop-gaps—Dec 13 and, yes, Dec, 31.

Texas voters say yes to state constitutional amendment to ban state income tax. GOP Governor Greg Abbot sees the passage of Proposition 4 as a victory. Texas will no longer have the option to levy a state income tax—which opponents of the measure say might be needed given the financial burdens of the property tax and public education funding. But there may be an unintended consequence: Voters also may have trashed the state’s current business franchise tax.  

Colorado’s government will not get to keep extra tax revenue. Voters on Tuesday rejected Proposition CC, which would have allowed the state to spend revenues that exceed a cap enacted under the state’s Taxpayer Bill of Rights. Proponents had hoped passage would have boosted spending for infrastructure and public schools. 

When it comes to tax policy, get mad. But don’t get even. The tax code isn’t the most effective or efficient tool to exact revenge on political enemies, and using the tax system to get even diminishes the code’s credibility with voters. The Tax Hound shares a few examples about billionaires, state and local taxes, churches and, tariffs to illustrate why.

2020 news from the IRS. The IRS announced yesterday that the standard deduction will increase to $12,400 for individuals and married couples filing separately, $18,650 for heads of household, and $24,800 for married couples filing jointly and surviving spouses. 401(k) contribution limit will increase to $19,500 for 2020 and the catch-up limit will climb to $6,500. The agency also released tax rate tables for 2020 as well as its inflation adjustments for the alternative minimum tax exemption and several credit and deduction amounts. Forbes  summarizes  the new caps for tax filers preparing their 2020 and 2021 taxes. 

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