Opportunity Zones Program is Progressing… Offers Tax Incentives for Low Imcome Community Investment

22 Jun 2018

Zones for New Federal Tax Breaks Approved in All 50 States – Route Fifty, 2018/06/15

The selection process is now complete for the newly created Opportunity Zones program, which will offer federal tax incentives for investments in low-income communities.

On Thursday, the U.S. Treasury Department and the Internal Revenue Service announced that they’d approved a final round of zone designations, and that areas have been tapped for the program in all 50 states and the District of Columbia.


Proponents say Opportunity Zones hold great promise for drawing new money into communities that have previously failed to attract investment. But there are skeptics, as well, including some who point to the limited effectiveness of similar programs in the past.

There have also been worries that governors would skew their zone selections toward gentrifying areas.


The Opportunity Zones program was created as part of the sweeping federal tax overhaul that Republicans pushed through late last year.

Advertisements

CBO Reports Significant Increase in Tax Receipts from Last Year

9 May 2018

Monthly Budget Review for April 2018 Congressional Budget Office, 2018/05/07

Receipts for the first seven months of fiscal year 2018 totaled $2,012 billion, CBO estimates—$83 billion more than the amount during the same period last year.

Receipts collected in April were $30 billion to $40 billion larger than CBO expected when it prepared the estimates reported in The Budget and Economic Outlook: 2018 to 2028, which it issued on April 9. The bulk of that difference stems from larger-than-anticipated payments of individual income taxes. Those payments were mostly related to economic activity in 2017 and may reflect stronger-than-expected income growth in that year. Part of the strength in receipts also may reflect larger-than-anticipated payments for economic activity in 2018. The reasons for the added revenues will be better understood as more detailed information becomes available later this year.


The federal government realized a surplus of $218 billion in April 2018, CBO estimates—$35 billion larger than the surplus in April 2017.

CBO estimates that receipts in April 2018 totaled $515 billion—$59 billion (or 13 percent) more than those in the same month last year.

 

Translation… the tax cuts are working as intended.


Connecticut Looking For New Tax Revenue to Counter Rising Debt and Deficits

5 Mar 2018

Lawmakers Review Malloy Tax Plan – Hartford Courant, 2018/03/02

A key legislative committee debated Friday over Gov. Dannel P. Malloy’s revenue package that covers hiking taxes on cigarettes, gasoline, real estate sales and hotel rooms.

As the state is facing a deficit of nearly $200 million in the current fiscal year and higher deficits in the future, the tax-writing finance committee is facing a deadline of April 6 to craft a tax package in order to balance the state’s budget.


As part of the budget, Malloy is also proposing establishing highway tolls in Connecticut for the first time in three decades and raising the gasoline tax by 7 cents per gallon over four years.

The SALT deduction in the new federal tax plan is also a factor.

The new law, signed by President Donald Trump, imposes a cap of $10,000, but many large properties in Fairfield County and around the state have real estate taxes of more than $10,000 per year. The owner of a waterfront mansion in Darien, for example, can pay as much as $80,000 per year in property taxes.

Sullivan said that 66 percent of the $10.8 billion in impact in the SALT deduction is from people with incomes ranging from $200,000 to $500,000 per year.


Utility Companies Lowering Rates Because of Tax Bill

10 Jan 2018

The narrative of the tax bill is that it would only help the super rich. Not exactly…

Utilities cutting rates, cite benefits of Trump tax reform – Washington Examiner, 2018/01/09

Energy suppliers like Washington’s Pepco, Baltimore Gas and Light, Pacific Power, Rocky Mountain Power and Commonwealth Edison said they plan to give hundreds of thousands of customers a rate cut due to the tax reform.


In one announcement typical of those from the utilities sharing their tax benefits, Pacific Power said, “The benefit of this tax cut should be passed on to our customers – and we will work with our regulators and stakeholders on the best way to do that.”

 


The Rich Are Leaving Connecticut

8 Jan 2018

Editorial: Connecticut’s Money Is Moving Out – Hartford Courier, 2018/01/03

Those who moved out of Connecticut from 2015 to 2016 took with them more than $6 billion in adjusted gross income, or AGI. People who moved to Connecticut brought with them only about $3.36 billion in AGI. The total net loss to Connecticut: $2.7 billion. In one year. That was in the top five of all states, regardless of population.


The states that poached the most taxpayers from Connecticut were New York (8,202 tax returns) and Florida (7,944). The average adjusted gross income for those who left for New York was $111,653. That’s pretty bad, but it’s nowhere near as shocking as Florida, where the average return from former Connecticut residents was $253,187 in adjusted gross income.

That means more than $2 billion in income moved from Connecticut to Florida from 2015 to 2016, more than twice as much money as moved to New York.

You can legislate taxes… you can’t legislate every human response… at least not yet…


Southwest Airlines Rewarded Employees in Response to the Tax Bill

5 Jan 2018

There were 17 companies that rewarded employees in various ways since the passage of the tax bill. Here is #18…

Southwest Airlines cheers tax reform, announces cash bonuses for all employees – Washington Times – 2018/01/02

Southwest’s Chairman and Chief Executive Officer Gary Kelly announced on Twitter Tuesday evening that every person who started working for Southwest Airlines prior to Dec. 31, 2017, will soon receive a $1,000 cash bonus on Jan. 8, 2018.

“We applaud Congress and the president for taking this action to pass legislation, which will result in meaningful corporate income tax reform for the transportation sector in general, and for Southwest Airlines, in particular,” Mr. Kelly said in a short video shared on Twitter. “We are excited about the savings and additional capital, which we intend to put to work in several forms — to reward our hard-working employees, to reinvest in our business, to reward our shareholders, and to keep our costs and fares low for our customers.”


“I am also proud to report that we have donated an incremental $5 million to charitable causes as a result of tax reform,” Mr. Kelly added. “Throughout 2018, we will work with our charitable partnerships to put this money to work in the communities we serve and where our employees work and live.”


Private School Deduction in the Tax Bill

4 Jan 2018

This is how we learn what’s in the tax bill. We get little snipets here and there…

Losing Students, Private Schools Try to Change – Wall Street Journal, 2017/12/29

The Republican tax overhaul, signed into law last week, is expected to help families with children in private schools by providing a new tax break, possibly helping with enrollment.

The bill expands the use of Section 529 savings plans beyond college to allow up to $10,000 to be spent annually on tuition and qualified expenses for elementary or secondary public or private schools


Some supporters of public schools fret that the expansion of these accounts could shrink the public-school population and funding. But private school supporters—who broadly support the change—also agree it will primarily benefit wealthier families who can afford to save money for their children’s education.

“It’s a step in the right direction,” Education Secretary Betsy DeVos told reporters earlier this month. “But it doesn’t address the needs of parents who are from lower incomes and does not empower them in significant ways.”