New Canadian Prime Minister looks to run a deficit(Read article summary)
The new Canadian Prime Minister, Justin Trudeau, plans on running a deficit for the next three years and promises to balance it by 2019. This brief will help keep you up to date on this and other tax news.
They’re off to see the wizard (of tax and spending promises), because… of the wonderful things he does? TPC’s Howard Gleckman considers the enormous magnitude of most presidential candidates’ fiscal offerings. Democrat Bernie Sanders wants to make “the rich” pay a “damned lot” more in taxes to help pay for free college and universal healthcare for all. Republicans, by contrast, are all-in on big tax cuts. It takes at least a $1 trillion-tax-cut promise to get any attention at all. How would they pay for such cuts? Mostly, they don’t say. Will voters demand to see the offsets behind the curtain?
Meanwhile, back in Kansas: Tax pain may be chronic. Last year, the state’s cash-strapped lawmakers reduced deductions for mortgage interest and property taxes and eliminated the deduction for medical expenses. That generated $97 million in new revenue but could mean a big tax hit for many Kansans when they file next year, especially the elderly or those with middle incomes.
Leave more than your heart, get a great tax break. At least that’s the case for businesses in San Francisco’s Mid-Market district. They’ve been taking advantage of the “Twitter tax break.” The incentive program was designed in 2012 to retain tech firms that might have bolted for Silicon Valley. Companies stayed and avoided about $34 million in city payroll taxes in 2014, up from $4 million in 2013. San Francisco includes stock options in its payroll tax calculations and several Mid-Market district companies went public recently.
In 2016, expect more protection from taxpayer identity theft. The IRS and tax industry leaders have tested 20 new data elements on tax returns aimed at preventing fraudulent refunds. The new safeguards shouldn’t add much time to electronic filing but the anti-fraud effort could cost $281 million.
In Canada, a new Prime Minister with big plans. In a sweeping Liberal victory, Justin Trudeau is now our northern neighbor’s leader. His party promises a Canada Child Benefit for parents, worth about C$2,500 a year for a family of four. Middle-income taxpayers may see a tax rate cut from 22 percent to 20.5 percent. To cover some of the tab, he’d create a new 33 percent bracket on earnings over C$200,000. To help pay for public transportation, Trudeau plans to run deficits of C$25 billion over three years to take advantage of low interest rates, but promises to bring the nation back into the black by 2019.
On the Hill: Paul Ryan issues an ultimatum. The House Ways & Means Chair from Wisconsin says he'll run for Speaker of the House if every caucus endorses him and accepts him as "unity candidate." They have until Friday to decide. The Hill reports that Ryan said, "I know this sounds conditional, because it is."
This article first appeared on TaxVox.