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The Hill
02-06-2025
- Business
- The Hill
Blue states vs. red states
The Big Story Democrats and blue-state Republicans defend the state and local tax (SALT) deduction and advocate for a higher cap because their states often pay more in taxes than they get back in services. © The Associated Press They distinguish between 'donor states' and 'taker states' and argue that, as donors, they should be able to fully exempt their regional taxes from their federal tax bill. 'Most of these states … are high tax states that give more to the federal government than they get back in federal services. Most of the red states are taker states, states that get more from the federal government than they actually pay in taxes,' Rep. Tom Suozzi (D-N.Y.) said during a markup of the tax portion of the GOP bill earlier this month. 'It's really not fair that we are being stuck with this cap on our state and local tax deduction because people are getting taxed on taxes that they've already paid,' he said. Republicans in red states see things dramatically differently. They argue many residents of blue states are simply living in high-tax areas and shouldn't get a federal tax reduction for doing so. If they want lower taxes, vote to lower the local taxes or move. State tax experts say blue states are generally sending in more to the federal government than they are getting out in benefits because they have larger local economies and more higher-income taxpayers. The Hill's Tobias Burns has more here. Welcome to The Hill's Business & Economy newsletter, I'm Aris Folley — covering the intersection of Wall Street and Pennsylvania Avenue. Did someone forward you this newsletter? Subscribe here. Essential Reads Key business and economic news with implications this week and beyond: GOP beats down key budget office over tax plan projections Republicans are using Congress's official budget scorer as a whipping boy, as they argue a major package of President Trump's tax priorities is costless, despite multiple projections placing the plan's price tag at trillions of dollars over the next decade. Wall Street drifts higher as oil prices jump and US manufacturing slumps U.S. stock indexes drifted closer to their records on Monday, coming off their stellar May, which was Wall Street's best month since 2023. Disney laying off hundreds of employees The Walt Disney Co. is laying off hundreds of its employees, a company spokesperson told The Hill on Monday. The Ticker Upcoming news themes and events we're watching: In Other News Branch out with more stories from the day: Campbell's Co. says sales rise as more Americans cook meals at home The Campbell's Co. said Monday it saw stronger sales of broth and condensed soup in its latest quarter … The Hill Event Invest In America Wednesday, June 4 at 8 a.m. EDT — Washington, D.C. Join The Hill for a half-day summit featuring titans from Washington and Wall Street, focused on solutions-oriented conversations that will deliver insights into the future of the domestic and global economy, covering everything from tariffs, investing, AI, crypto, taxes and more. Good to Know Business and economic news we've flagged from other outlets: What Others are Reading Top stories on The Hill right now: Kavanaugh signals Supreme Court will soon decide constitutionality of banning AR-15s The Supreme Court on Monday declined to take up a case that involves whether possessing AR-15s is protected by the Second Amendment, but the court's conservatives are signaling they soon will. Read more Bannon: Graham should be arrested if he keeps 'stirring it up' in Ukraine MAGA insider and former Trump White House chief strategist Steve Bannon said Monday that Sen. Lindsey Graham (R-S.C.), one of Kyiv's strongest backers in Congress, should be 'arrested' if he doesn't stop traveling overseas and 'stirring it up' in Ukraine. Read more What People Think Opinions related to business and economic issues submitted to The Hill: You're all caught up. See you tomorrow!
The Hill
13-05-2025
- Business
- The Hill
GOP tax bill would add trillions to debt
The Big Story The tax portion of the Republican policy bill would cost $3.7 trillion over the next decade, said Joint Committee on Taxation (JCT) found. © The Associated Press That fits within the parameters laid out in the budget blueprint Congress adopted earlier this year, which allowed the House Ways and Means Committee up to $4.5 trillion for changes that could increase the deficit. Tables from the JCT, which is the official revenue scoring body of Congress, show that extensions of the 2017 tax cuts and other measures will add about $5.6 trillion to the deficit, while cuts to renewable energy incentives and amped international tax enforcement will reduce the deficit by about $1.9 trillion. The deficit addition is rubbing GOP budget hawks the wrong way, though some say they intend to be open-minded about it. The core element of the GOP tax package is the extension of the individual rate reductions made in 2017, which put marginal tax rates at 10, 12, 22, 24, 32, 35, and 37 percent — most of which were brought down by a few percentage points. Those rate continuations will reduce federal revenues by $2.2 trillion through 2034. The extension of the increased standard deduction, which was $29,200 for married couples and $14,600 for individual filers in 2024, would add $1.3 trillion to the deficit. However, the Trump tax cuts also did away with personal exemptions, which more than offset the cost of a higher standard deduction and will contribute $1.8 trillion in federal revenues through 2034. The Hill's Tobias Burns has more here. Welcome to The Hill's Business & Economy newsletter, I'm Aris Folley — covering the intersection of Wall Street and Pennsylvania Avenue. Did someone forward you this newsletter? Subscribe here. Essential Reads Key business and economic news with implications this week and beyond: Microsoft laying off 6,000 employees Microsoft on Tuesday began laying off nearly 3 percent of its total workforce — or about 6,000 employees. O'Leary: China trade deal will serve as 'hallmark for all other countries' Businessman Kevin O'Leary said he believes a forthcoming trade deal with the United States' and China will serve as a model for other nations. Small business optimism declines: Survey Small business optimism dipped in April for the fourth month in a row, according to the monthly National Federation of Independent Business (NFIB) survey released Tuesday. US-China trade pact brings relief to tech sector The tech industry is breathing a sigh of relief after the U.S. and China agreed to substantially lower tariffs, underscoring the prospect of de-escalation in a trade war that has been particularly challenging for the sector. Tax Watch Republicans, Johnson to meet as impasse hardens Moderate Republicans from high-tax blue states are set to meet with Speaker Mike Johnson (R-La.) on Tuesday, as the impasse over the state and local tax (SALT) deduction cap hardens. News of the gathering comes shortly after Rep. Mike Lawler (R-N.Y.), one of the most vocal supporters of increasing the SALT deduction cap, said negotiations between the SALT Caucus and leadership had not been happening. The House Ways and Means Committee, which has jurisdiction over taxes, included a $30,000 SALT deduction cap for individuals making less than $400,000 in its portion of the GOP's megabill — triple the current $10,000 cap — which those in the SALT Caucus rejected. The group is pushing for a higher cap: During a meeting Monday with Johnson and Republicans on the House Ways and Means Committee, the group floated a $62,000 cap for single filers and $124,000 for joint filers — a large difference from the proposal in the text. Asked about conversations Tuesday, Johnson said the group was nearing an agreement. 'We're still having discussions, dialogue this afternoon, working on it. And we're very close, I think, to finally resolving it,' Johnson said. Mychael Schnell has more here. Tax Watch is a regular feature focused on the fight over tax reform and extending the 2017 Trump tax cuts this year. Email a tip The Ticker Upcoming news themes and events we're watching: In Other News Branch out with more stories from the day: US-China deal to slash tariffs also eases burden on cheap packages WASHINGTON (AP) — Online shoppers in the U.S. will see a price break on their purchases valued at … The Hill Event Invest In America Thursday, June 5 at 8 a.m. EDT — Washington, D.C. Join The Hill for a half-day summit featuring titans from Washington and Wall Street, focused on solutions-oriented conversations that will deliver insights into the future of the domestic and global economy, covering everything from tariffs, investing, AI, crypto, taxes and more. Good to Know Business and economic news we've flagged from other outlets: What Others are Reading Top stories on The Hill right now: DNC moves toward nullifying election of David Hogg, Malcolm Kenyatta as vice chairs The Democratic National Committee (DNC) has taken a first step toward possibly requiring a new election for two of its vice chairs, including David Hogg, who has stirred controversy with his call for primary challenges to longtime incumbents in safe seats. Read more First judge approves Trump invoking Alien Enemies Act to deport Venezuelans A federal judge ruled Tuesday that President Trump can invoke the Alien Enemies Act (AEA) to remove Tren de Aragua members but determined the administration has provided insufficient notice before carrying out the deportations. Read more What People Think Opinion related to business and economic issues submitted to The Hill: You're all caught up. See you tomorrow! Thank you for signing up! Subscribe to more newsletters here
