Tax News & Views Trump's New Tax Plan Roundup

August 26, 2020

President Trump Outlines Second Term Tax Ideas – Erica York, Tax Policy Blog. “While light on detail, the agenda includes a few tax policy items like expanding existing tax breaks, creating credits for specific industries and activities, and unspecified tax cuts for individuals. The president has also expressed support for other policy changes related to capital gains and middle-class tax cuts. Of note, none of the campaign documents so far have detailed a plan for the expiring provisions under the 2017 Tax Cuts and Jobs Act (TCJA).”

The President’s proposals center on jobs and reliance on China.

“First, he proposes an unspecified tax cut to boost take-home pay and an unspecified “Made in America” tax credit. Additionally, he proposes to expand Opportunity Zones, a program created under the TCJA to spur investment in economically distressed census tracts by providing capital gains tax relief for individuals and businesses investing in qualified opportunity zones. These three proposals are grouped with other policies that are intended to create jobs.

The agenda also outlines two policy proposals for companies that bring back jobs from China. First is an unspecified tax credit for companies. Second is allowing 100 percent expensing for certain industries (pharmaceuticals and robotics) that bring manufacturing back to the United States. The proposal does not specify what types of assets would qualify for the 100 percent deduction, whether it would be permanent, or how it would be determined that a company is “bringing back manufacturing.” Full expensing is a highly cost-effective tax reform to boost growth but limiting the policy to specific industries is not ideal. It would be more economically beneficial to broadly improve cost recovery across all industries.”


Trump payroll plan would deplete Social Security by 2023: Administrator – Niv Elis, The Hill. “President Trump's proposal to eliminate payroll taxes would deplete the Social Security retirement trust fund by 2023, and its disability insurance fund by the middle of next year, according to the Social Security Administration.

Related: Democrats Blast Possibility of Permanent Payroll Tax Cut – Jad Chamseddine, Tax Notes ($)


More Guidance, More Problems for PPP Borrowers – Eric Yauch, Tax Notes ($). “The interim final rule released August 24 further clarifies what it means to be an owner-employee for purposes of loan forgiveness — a topic that has caused headaches for Paycheck Protection Program borrowers since the Small Business Administration first used the term months ago but didn’t define it.”

“In the latest guidance, the SBA says owner-employees with an ownership stake of less than 5 percent in a C corporation or S corporation aren’t subject to the owner-employee compensation rules. The rule says the exemption is meant to cover owner-employees who don’t have a meaningful ability to influence decisions on how loan proceeds are allocated.”


Tax Incentives Key Part of Senate Democrats’ Climate Plan – Alexis Gravely, Tax Notes ($).About two dozen energy tax proposals were included in a report released August 25 and prepared by the Democrats’ 10-person Special Committee on the Climate Crisis with the goal of net-zero greenhouse gas emissions by 2050. Although specifics for many of the tax proposals aren’t included, they focus largely on long-term incentives for reduced emissions, upgraded infrastructure, and innovative technologies.”

IRS Extends Tax Deadlines for Victims of Iowa Derecho & California WildfiresRuss Fox, Taxable Talk.

“For both disasters, tax deadlines are extended that began on August 10th for the derecho and August 14th for the wildfires until December 15th. This impacts 2019 personal tax returns on extension, business returns on extension, payroll tax filings, and estimated tax payments. California’s Franchise Tax Board automatically extends deadlines for federal disasters, so those impacted have identical extensions for California taxes. I assume the Iowa Department of Revenue will similarly extend Iowa deadlines.”

Crypto Users Are Receiving IRS Tax Warning Letters, Again – Shehan Chandrasekera, Forbes. “These letters along with the new placement of the crypto question on Form 1040 show IRS’s continuous effort in regulating the crypto tax space.”


Americans can’t stop shoving pizza into their faces – CNN.

Even bad pizza is still pizza....

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