Rahm Emanuel wants more taxes in Chicago(Read article summary)
Chicago Mayor Rahm Emanuel is seeking added taxes to pay for school construction. This brief will keep you updated on that and other tax news.
Inversion rules are on hold, for now. It’s been a year since Treasury warned that it would crack down on corporate inversions—buying a share of foreign company and using its mailing address to garner a lower tax rate. Why so long a wait? “I think the Treasury is simply stymied,” said TPC’s Steve Rosenthal. “For the government, putting guidance or action on hold is always the easiest thing.” Just by announcing the rules, however, Treasury may have created enough uncertainty to slow some deals. Rosenthal adds, “If Treasury thought that the U.S. corporate tax base was eroding quickly, I think they would take some actions quickly.”
Are Colorado’s schools benefitting from the state’s pot tax? Not necessarily. If Colorado collects $40 million or less from an excise tax, the money has to be distributed through a competitive grant program called “Building Excellent Schools Today,” or BEST. The first round of BEST grants were awarded in May and 26 public school projects won funds in 22 school districts. But not all districts could compete for the cash. Those where a majority of voters opposed the sale of recreational marijuana are ineligible—even though pot tax contributes to only 1 percent of total BEST funding.
Today, Chicago Mayor Rahm Emmanuel will ask for more tax increases. He’ll ask the city’s aldermen to approve a $45 million property tax increase to pay for school construction. This tax would be on top of one proposed by the school board to address its deficit, and the $450 million to $550 million property tax increase Emanuel wants to help cover the cost of local public pensions.
And in Baltimore, Mayor Stephanie Rawlings-Blake wants tax breaks for some supermarkets. That’s if they renovate or build in certain areas of the city known as “food deserts.” Her hope: Tax incentives would encourage grocery stores to locate in distressed neighborhoods. The subsidies include an 80 percent cut in the 5.62 percent personal property tax for ten years. Owners would have to spend $150,000 or $25 per square foot of floor space to build or remodel markets in or next to an area with few supermarkets, low household incomes, and few cars.
Sweden thinks tax hikes will keep its economy growing. The government’s budget would raise taxes on those making more than $6,504-a-month, reduce a rebate on the labor cost of household renovations, and raise taxes on diesel, gasoline, and certain savings accounts. The plan could generate about $4.2 billion for housing, education, and immigration. The nation’s economy has outperformed many other European nations recently, and is among the most open to Syrian refugees.
Uncovering the Hidden Wealth of Nations… A new book by Gabriel Zucman, a student of economist Thomas Piketty, examines the “scourge” of tax havens around the world. Zucman examined central bank data from various countries and found trillions of dollars in assets stashed in investment funds incorporated in tax havens. Swiss banks are responsible for about a third of this hidden wealth, Zucman says. He further estimates at as much as 30 percent of the wealth owned by the richest in Africa and Latin America is offshore. For Russia, the share of offshore wealth is as much as 50 percent.