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BPAA Biweekly Federal Policy Updates - February 22

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TAX UPDATE

  • Bloomberg Government reports - Rolling Back the 2017 Tax Overhaul: Democrats, and a few Republicans, are pushing to undo things they don’t like about the 2017 tax overhaul. Efforts to lift the $10,000 cap on the deduction for state and local taxes, or SALT deduction, were in the spotlight on Feb. 12 when New York Governor Andrew Cuomo met with President Donald Trump to discuss it. Trump made no promises, but National Economic Council Director Larry Kudlow said he’ll discuss it with Cuomo again. State officials are also lobbying to undo the tax law’s repeal of subsidies for bonds issued for a major type of refinancing, Bloomberg’s Amanda Albright reported.
    • SALT Push in Congress
      • House Ways and Means Committee Chairman Richard Neal (D-Mass.) hasn’t promised action in the House, but signaled he’ll at least discuss the issue during committee hearings. Pressure is mounting as many taxpayers express disappointment when filing their first returns under the new system.
      • Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said SALT legislation (S. 437) stands no chance in his committee. Bill sponsor Sen. Bob Menendez (D-N.J.) suggested that Democrats could use it as a bargaining chip in exchange for support for technical corrections to errors in the 2017 tax overhaul.
      • The cap is being felt hardest in higher-tax states, such as California, Hawaii, Massachusetts, and New Jersey, which have the top state income tax rates in the country. Residents of some of those states, including New Jersey, also face high property tax bills, according to Menendez and Rep. Bill Pascrell (D-N.J.), who introduced the companion SALT repeal measure (H.R. 1142).
  • Business Insider - Many Americans are freaking out about getting a smaller tax refund this year — here's why it's happening:
    • Quick facts:
      • Tax Day 2019, the last day to file your 2018 tax return, is Monday, April 15.
      • According to IRS data for the second week of this year's filing season, the average federal tax refund amount was down 8.7% from last year, to $1,949.
      • Smaller refunds are drawing the ire of many Americans, including prominent Democrats who are blaming the tax law President Donald Trump enacted in 2017.
      • While many Americans who use tax refunds as a savings vehicle are disappointed, a refund is not indicative of a person's tax bill but of the amount withheld from their paycheck.
      • Middle-class Americans, on average, saw their taxes go down for the 2018 tax year.
    • Many Americans are especially frustrated this tax season, the first under President Donald Trump's new tax law. According to IRS data for the second week of this year's filing season, the average federal tax refund amount was down 8.7%, to $1,949, compared with the same window last year. The total number of refunds issued dropped by more than 15%. Taxpayers who e-file and request direct deposit should see their refund hit their bank account within 21 days of submitting their return. Many have said they aren't happy with the size of their refund this year, and some even owe money to the IRS. While many Americans rely on the windfall from a tax refund, financial experts say a larger or smaller refund is not indicative of whether a person paid more or less in taxes but of the amount withheld from their paycheck. Big tax refunds generally mean you paid too much in taxes — you had too much income tax taken out of each paycheck, and now the IRS is returning what is rightfully yours. Instead of keeping your money in a savings or retirement account where it could earn interest all year, you essentially gave an interest-free loan to the government, Business Insider previously reported. Read more at Business Insider.
  • FTC to Host Forum on Small Business Financing: The Federal Trade Commission will host a forum on small business financing on May 8, 2019, to examine trends and consumer protection issues in this marketplace, including the recent proliferation of online loans and alternative financing products. Small businesses are an integral part of the U.S. economy, and they often need financing in order to operate and grow.  While some business owners can secure loans from banks or other traditional lenders, many businesses must turn to alternative sources for capital.  In recent years, the online marketplace for small business financing has offered a wide variety of products, including term loans, lines of credit, and cash advances. Though some options may provide unique benefits, such as quicker access to capital, some of these products also raise consumer protection concerns, like high costs and potentially unclear terms.  Unfortunately, there have also been reports of deception and other harmful practices by some companies offering small business financing. Read more at the FTC Release.

MUSIC LICENSING

  • Graham Warns DOJ Not To ‘Disrupt’ Music Market With ASCAP-BMI Changes: The new chairman of the Senate Judiciary Committee is sending a clear signal to the Dept. of Justice not to throw the music marketplace into chaos with proposed changes to the consent decrees governing ASCAP and BMI. Assistant Attorney General Makan Delrahim, who heads the Antitrust Division, has backed a “smooth transition” toward a “market-based” framework. That could have implications for how much radio ultimately pays to songwriters for music use.
    • Senator Lindsey Graham (R-SC), who last month took the reins of the Judiciary Committee, says he’s concerned the DOJ is moving to revise or terminate the ASCAP and BMI consent decrees without establishing an alternative licensing mechanism. “The reality is that the current market is functioning rather well,” he wrote in a letter last week to Delrahim. Graham said that music licensees, such as radio stations, and songwriters have both depended on the efficiencies that the consent decrees have provided. Without that framework in place, Graham says it “could severely disrupt the entire music licensing marketplace.” Read more at InsideRadio.
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