Democrats Storm Nevada Ahead of High-Stakes Caucuses: Democratic presidential contenders are blitzing Nevada in the final week before the state’s caucuses, a contest that could determine whether Sen. Bernie Sanders has staying power at the top of the pack and whether centrists will rally behind an alternative or remain splintered. As they made appearances across the state, the candidates are preparing for a Wednesday night debate in Las Vegas that could include the debut of billionaire former New York City Mayor Michael Bloomberg, who has poured more than $400 million into his campaign with an eye toward the Super Tuesday states next month. Read more at the Wall Street Journal.
Nevada Caucuses Could Be a Preview of What’s to Come The Nevada caucuses on Saturday will be the first contest of the Democratic presidential race with a racial makeup that (very roughly) reflects the population of the nation as a whole. So while the actual delegate haul is rather small, the results could be read as a preview of what’s to come in the weeks and months ahead.
- Senator Bernie Sanders is favored to win the caucuses — buoyed by his support among young people, Latinos and very liberal voters, a coalition that he hopes will carry him to success across the country.
- A Las Vegas Review-Journal/AARP Nevada poll conducted last week found Mr. Sanders in the lead with 25 percent of the vote, including about three-fifths of voters under 30 and a third of those identifying as very liberal. Separate surveys focused on Latinos have shown that Mr. Sanders has support from roughly a third of Hispanic caucusgoers. A Univision News poll of registered Latino voters put him at 33 percent, while a Telemundo poll — which focused only on those deemed likely to caucus — gave him 31 percent support.
- The Telemundo survey put him in a statistical tie with former Vice President Joseph R. Biden Jr., who pulled 34 percent support.The Democratic candidates sparred in a fiery debate on Wednesday in Las Vegas, but it may not have much impact on the state’s results. That’s partly because the focus of the night fell most heavily on Michael R. Bloomberg, the former mayor of New York City, who came under merciless attack from all five of his onstage rivals — but who is not competing in the Nevada caucuses. Read the full article at The New York Times
Corporate Tax Chasm: All indications are that the House Ways and Means on the hearing on Feb. 11 focused rather heavily on international tax rules and the Treasury regulations that flesh out the new policies enacted in the 2017 tax law, H.R. 1 (115). But the hearing is also an opportunity to point out just how divided the two parties are over the corporate rate these days. It wasn't that long ago, as key Republicans and Democrats sought that elusive bipartisan tax overhaul, that the corporate side of the tax code was seen as comparatively low-hanging fruit.
- Former President Barack Obama floated a top corporate rate of 28 percent, and former House Ways and Means Chairman Dave Camp (R-Mich.) wasn't that far away at 25 percent. Now, Democratic presidential contenders generally are seeking a significant increase to the 21 percent corporate rate, with Pete Buttigieg, Bernie Sanders and Elizabeth Warren all calling for a return to the 35 percent rate that was in place before the tax cut. (Former Vice President Joe Biden is pushing that 28 percent Obama rate, while Amy Klobuchar is down at 25 percent.) It's also hard to imagine Republicans going back to 25 percent without a fight or some concessions, given that would be higher than the current average for Organization for Economic Cooperation and Development countries. All of which raises some interesting questions about the future of the corporate rate. For instance: How high could Democrats get the corporate rate if and when they have full control in Washington? Would continued divided government mean that the 21 percent rate basically gets entrenched, and the two parties would face off over moving it slightly in either direction?
Trump weighing 10 percent middle-class tax cut plan President Donald Trump’s long-promised “Tax Cuts 2.0” plan will be released in September, with a 10 percent cut for middle-income taxpayers under discussion, a top White House official said today.
- “In a meeting in the Oval, I guess two days ago, he looked at me and he said, ‘Let’s get it out by September,”National Economic Council Director Larry Kudlow told Fox Business Network. “We’d love to have a 10 percent middle-class tax cut, and we would love to strengthen and make permanent some of other tax cuts.”“It will come out sometime in September,” he said.
- As the timing of the plan’s release indicates, the proposal is mostly designed to set up a contrast with Democrats ahead of the November elections. Democrats’ tax plans are focused on raising taxes on the rich.
- Stung by criticism their 2017 tax overhaul didn’t do enough for average Americans, Republicans have been raising the prospect of another round of tax cuts for almost two years. Among the ideas that have been under consideration is what the administration envisions as a 15 percent tax rate on the middle class, though it's unclear how that would work. Read the full article at Politico
Rules for Tax Law’s Curb on Loss Offsets Under White House Review: Companies’ use of net operating losses to whittle their effective tax rates has had critics up in arms, and the White House is now reviewing IRS rules for a 2017 tax law provision meant to curb the practice. The provision contains a drafting error that predominantly hurts struggling retailers, but the agency isn’t likely to fix it given that it said dealing with another drafting error wasn’t within its authority. Tax professionals don’t expect the package of regulations to be very large, but hope it addresses situations in which companies are trying to simultaneously write off losses from different periods subject to different limitations—another issue that may require congressional action.
- “I don’t think that this should be a very substantial set of rules,” said Nick Gruidl, a partner at RSM US LLP. “I look at this as more of them just trying to interpret the statute and make sure it works.”
- The law capped at 80% the amount of income companies can shield from tax using net operating losses from prior years, under tax code Section 172. Companies also can no longer carry losses back to previous years when they may have been more profitable and thus would have found those tax offsets more useful. They used to be able to carry losses back two years.
- Now, however, companies can carry relatively newer losses forward indefinitely, when under prior law the losses would expire after 20 years.