Reduced SALT and State Tax Changes

Taxes

Ways & Means approves a temporary repeal of the SALT deduction cap. In an unsurprising near party-line vote, the House tax writing panel approved a bill to raise the cap to $20,000 for 2019 and eliminate it for 2020-2021. The Tax Cuts and Jobs Act imposed a $10,000 cap on state and local tax deductions. The committee would pay for the changes by raising the top tax rate from 37 percent to the pre-2018 rate of 39.6 percent.  

Utah legislature begins special tax reform session today. Earlier this week the  Tax Restructuring and Equalization Task Force voted to recommend a 199-page draft bill on tax reform to the full legislature. The bill, released to the public last week, would raise taxes on food, gas, and some services and lower income taxes. It would cut taxes by a net $160 million.

An alcohol tax in Anchorage? The Alaskan city will try for the ninth time since 1984 to levy a local tax on alcohol. The goal: Raise $11 million to $15 million annually to combat homelessness. Voters rejected a previous attempt to pass the 5 percent tax in April, after the alcohol industry spent $300,000 to oppose it.  But two Assembly(city council) members plan to introduce the bill again next week. If  8 of the 11 Assembly members approve, Anchorage voters will see it on their April 7, 2020 ballot.

No local income tax in Granger, Washington. The city council voted unanimously to block  a local income tax, joining the cities of Spokane and Spokane Valley. In July, a state appeals court overturned a state law banning local income taxes. The State Supreme Court will review  that decision.

Onward with a financial transaction tax in Europe… Germany, France, Italy, and seven other countries are advancing their plans to levy a joint financial transaction tax on stock trading. Investors who buy shares in large companies (with a market value over $1.1 billion) based in those countries would pay at least 0.2 percent of  the transaction’s value. The countries would not tax initial public offerings, market making, share buy backs, or purchases by pension funds.

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