Key Takeaways
- Tax Legislation
- Tariffs
- Energy Credits
- Government Restructuring
- Church Political Speech
- In the Courts
- Sugar Cookie Day
Tax Legislation
With Taxes and Tariffs in Place, Trump Takes Reins of U.S. Economy – Tony Romm and Colby Smith, New York Times:
With the major components of his agenda now coming into focus, President Trump has already left an indelible mark on the U.S. economy. The triumphs and turbulence that may soon arise will squarely belong to him.
Trump Got His Tax Bill. Now the Task Will Be Implementing It. – Alexander Rifaat, Tax Notes ($):
In addition to permanently extending several expiring provisions from the Tax Cuts and Jobs Act, the reconciliation package signed into law by President Trump July 4, titled the One Big Beautiful Bill Act (OBBBA), introduces several additions to the code, including deductions for some tipped income, overtime pay, and Social Security benefits for seniors.
While the bill ostensibly fulfills many of the promises Trump made during his campaign last year to take back the White House, some observers argue that the short time frame for Treasury to put out sufficient guidance coupled with the administration’s other objective of making significant cuts to the department’s workforce — in particular, the IRS — could present challenges in the rulemaking process.
Does the Debt Impact of Trump’s Tax Bill Matter?: QuickTake – Matthew Boesler, Bloomberg ($). “The federal budget deficit is back in the spotlight after the Republican-controlled Congress approved a massive tax and spending package on July 3 aimed at realizing President Donald Trump’s domestic agenda. The non-partisan Congressional Budget Office estimates the measure will add $3.4 trillion to the national debt over a decade. Already, the deficit has been gradually widening over the last decade or so, bucking the typical pattern of narrowing in times of economic expansion.”
OBBBA Is the Biggest Tax Bill Ever. Why Doesn’t It Feel Like It? – Doug Sword, Tax Notes ($):
But it just doesn’t feel like as big of a deal.
“It wasn’t the kind of transformational rethinking of our tax code,” Jonathan Traub of Deloitte Tax LLP said of the tax title in the One Big Beautiful Bill Act (H.R. 1) signed into law July Fourth. “A lot of what’s in this one is stuff that’s already in current law. It doesn’t seem like a tax cut if you’re keeping the rates the same as they are.”
Trump’s tax law includes a $40,000 SALT cap. Here’s who qualifies. – Jeff Stein, Washington Post:
That 2017 law, the Tax Cuts and Jobs Act, limited the deduction to $10,000 a year, imposing a cap for the first time as a way of reducing the bill’s overall cost. Residents of high-tax states — and their representatives in both parties in Congress — had sought to raise the limit since then. But the push this year set off a major fight within the GOP, as most beneficiaries of the change are in Democratic-run areas.
New Bill Would Reverse GOP Tax Law’s Reduced Gambling Deduction – Katie Lobosco, Tax Notes ($):
Introduced by Rep. Dina Titus, D-Nev., the bill would restore the 100 percent deduction for gambling losses, which was lowered to 90 percent in the Republicans’ reconciliation package.
Lawmakers Float Reversing GOP Tax Law’s Gambling Loss Change – Chris Cioffi, Bloomberg ($):
Rep. Dina Titus (D-Nev.) proposed legislation that would restore the 100% deduction for gambling losses, reversing the new tax law that cut the deduction amount to 90%. Titus’ bill attracted the support of Republican Rep. Troy Nehls (Texas) and is also cosponsored by Rep. Ro Khanna (D-Calif.).
Tariffs
Trump Treats Tariffs More as a Form of Power Than as a Trade Tool – Maggie Haberman, New York Times:
But while Mr. Trump spoke about tariffs off and on before becoming a presidential candidate, he usually described his broader grievance about trade in terms of other countries or companies “ripping off” the United States. It is since Mr. Trump became a candidate in 2015 that he has talked about tariffs in earnest, describing them as a tool that he could easily deploy to rebalance the country’s economic footing.
Trump Tariff Fights Put Spotlight on Major Questions Doctrine – Natalie Olivo, Law 360 ($):
If current tariff litigation ends up before the Supreme Court, it could provide an opportunity for the justices to clarify the doctrine, which generally says that large-scale regulatory initiatives must have clear congressional authorization. However, specialists say that although the tariffs likely trigger the doctrine, the high court may decide the issue on other grounds, potentially keeping the door open for differing interpretations by lower courts.
Trump Vows No Tariff Extension, Hardens Threats on Copper, Drugs – Stephanie Lai, Bloomberg ($):
The posturing on social media and at a Cabinet meeting on Tuesday came after traders initially shrugged off a series of letters and executive actions Trump issued Monday, pushing back the deadline for his so-called “reciprocal” tariffs while announcing the latest rates he planned for more than a dozen countries that had not succeeded in brokering quick trade agreements.
Another Tariff Deadline Extension Raises Questions – Michael Smith, Tax Notes ($):
On July 7 President Trump signed an executive order extending the deadline for U.S. trading partners to sign trade deals until August 1. On April 2 he had announced reciprocal tariffs targeting almost all the United States' trading partners, but on April 9 he announced a 90-day pause.
Energy Credits
Trump’s crackdown on renewable energy has just begun – Jake Spring, Washington Post:
The order aims to placate the right-wing House Freedom Caucus, which argued the One Big Beautiful Bill Act signed by Trump on July 4 should have gone further to cut subsidies and reduce the law’s impact on the deficit.
Trump Order Squeezes Wind, Solar Sectors Reeling from Tax Law – Erin Schilling, Bloomberg ($):
Trump’s Monday executive order requires the Treasury secretary to enforce the new GOP tax law’s end of clean electricity production and investment tax credits, also referred to by the section codes 45Y and 48E. That includes issuing new and revised guidance related to the beginning of construction rules within 45 days of the law’s enactment.
Government Restructuring
Supreme Court Lets Trump Proceed with Broad Workforce Cuts – Greg Stohr and Zoe Tillman, Bloomberg ($):
Granting a Trump request over one dissent, the justices on Tuesday cleared the administration to implement Trump’s Feb. 11 executive order, which opponents say could cause hundreds of thousands of federal workers to lose their jobs. The Supreme Court decision will apply while litigation goes forward.
High Court Allows Trump's Gov't Cuts and Restructuring – Katie Buehler, Law 360 ($):
The justices agreed to stay a preliminary injunction that halted personnel cuts, also known as reductions in force or RIFs, and restructurings at 14 Cabinet-level departments and eight independent agencies, which are part of President Donald Trump's larger plan to overhaul the federal government. However, the justices explicitly left open the possibility that they could rule against specific plans in the future.
Church Political Speech
Churches Can Endorse Political Candidates, IRS Says – Anna Scott Farrell, Law 360 ($):
Churches that engage in political speech from the pulpit "do not run afoul of the Johnson Amendment as properly interpreted," the Internal Revenue Service said Monday, referring to the 1954 ban. The agency made a joint request with the groups that brought the suit — National Religious Broadcasters, Intercessors for America and two churches — for court approval of a consent judgment.
IRS Agrees to Johnson Amendment Carveout for Churches – Kristen A. Parillo – Tax Notes ($):
In a joint motion for entry of consent judgment in National Religious Broadcasters v. Long, filed July 7 with the U.S. District Court for the Eastern District of Texas, the IRS said the ban “does not reach speech by a house of worship to its congregation, in connection with religious services through its customary channels of communication on matters of faith, concerning electoral politics viewed through the lens of religious faith.”
IRS Says Religious Groups Can Discuss Politics During Services – Laura d. Francis and Erin Slowey, Bloomberg ($). “Churches can speak about political campaigns and candidates to their congregations without losing their 501(c)(3) status, the IRS said in seeking to settle a constitutional challenge to rules surrounding religious organizations’ political speech.”
In the Courts
Bookkeeper’s Tax Conviction Stands After Fraud Conspiracy Appeal – John Woolley, Bloomberg ($). “The head bookkeeper of a moving and storage company was properly convicted of conspiracy to defraud the IRS, a federal appeals court ruled Tuesday.”
Tax Tipster's Whistleblower Claims Fail at DC Circ. – Asha Glover, Law 360 ($). “Claims by a tax tipster that the U.S. Tax Court had jurisdiction over his case seeking to overturn the IRS' denial of a whistleblower award cannot move forward, the D.C. Circuit found Tuesday while entirely dismissing another case over a similar issue.”
Tax Court Says IRS Offer In $57M Easement Case Isn't Binding – Anna Scott Farrell, Law 360 ($). “A settlement offer the Internal Revenue Service said it mistakenly made to a partnership after rejecting its $57 million conservation easement deduction is not binding, the U.S. Tax Court said Tuesday, declining the partnership's request to enforce the deal.”
What Day is it?
Its National Sugar Cookie Day! A fine day to celebrate all year long!
