Happy Monday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL–Anxiety grows in first tax season under Trump law: The 2018 tax-filing has been uniquely trying for taxpayers with slews of questions over how they will fare when they file for the first time under the GOP tax law.
Tax preparers say they see clients showing more interest and anxiety about their taxes this year, since many of them are aware that a new tax law was enacted but are unsure of exactly how they will be affected.
{mosads}Preparers also said that they’ve faced a number of challenges, because they have had to get up to speed on the tax law changes and manage their clients’ expectations.
“I would say this is probably the most stressful [filing season] in recent memory,” said Samantha Nelson, a tax manager at the accounting firm RubinBrown in Denver. The Hill’s Naomi Jagoda tells us why.
The background:
- The December 2017 tax law made a number of changes to the IRS code, including lower rates, a larger standard deduction, an expansion of the child tax credit and curbs to certain itemized deductions. Most of these changes took effect in 2018, making 2019 the first year taxpayers are filing under the new law.
- It’s also the first time that people are filing their taxes after the IRS issued new guidance that adjusted the tax withholding from people’s paychecks to reflect key provisions in the tax law.
- People get refunds if they have too much money withheld from their paychecks, and owe the IRS money when they file if they didn’t have enough withheld throughout the year.
The confusion:
- Many taxpayers have been focused on the size of their refund, which reflects how much they overpaid in taxes over the course of the year. While many who got a smaller refund still got a tax cut, most focus on their refunds because they count on them to pay off debt or make major purchases.
- IRS data released Thursday found that the average refund through Feb. 22 is 1.3 percent bigger than the average refund was at a similar point last year, after earlier batches of IRS data showed a decline in the average refund size.
LEADING THE DAY
Dems launch sprawling probe of Trump family, administration: Democrats on the House Judiciary Committee unleashed an expansive probe of President Trump’s family, campaign, business and administration on Monday that includes more than 80 requests for documents.
The investigation, led by Judiciary Chairman Jerrold Nadler (D-N.Y.) will focus on three key areas: obstruction of justice, public corruption and abuses of power. Nadler rolled out the expansive investigation less than a week after the president’s former attorney Michael Cohen delivered explosive public testimony against him on Capitol Hill.
Democrats will be looking at those involved in the June 2016 Trump Tower meeting between Trump campaign officials and a Russian lawyer linked to the Kremlin, the Trump Organization’s plans to build a Trump property in Moscow and a scheme to pay off two women who alleged they had affairs with Trump before the 2016 election.
Trump blasted the investigation as a “hoax” but said he would comply with it, telling reporters at a White House event to congratulate a college football team’s championship that “I cooperate all the time with everybody.” The Hill’s Olivia Beavers and Morgan Chalfant break it down here.
- The committee is demanding a trove of documents from the White House, including those related to the removal of former national security adviser Michael Flynn, the termination of former FBI Director James Comey and any conversations about the removal of special counsel Robert Mueller.
- They also want documents from Allen Weisselberg, the Trump Organization’s chief financial officer.
- The committee is also asking for documents from a slew of current and former White House and administration officials, including Flynn, Trump son-in-law and senior adviser Jared Kushner, former White House chief of staff Reince Priebus, former White House communications director Hope Hicks and former White House counsel Don McGahn. The panel is seeking documents from 81 people or entities.
McConnell says Senate will pass resolution blocking Trump border emergency: Senate Majority Leader Mitch McConnell (R-Ky.) on Monday said that he expects a resolution blocking President Trump’s emergency declaration to pass the Senate, but he does not believe lawmakers will be able to override a veto.
“I think what is clear in the Senate is that there will be enough votes to pass the resolution of disapproval, which will then be vetoed by the president and then in all likelihood the veto will be upheld in the House,” McConnell said while speaking to reporters in Kentucky.
What changed: The resolution blocking Trump’s emergency declaration appeared to clinch the 51 votes needed to pass the Senate when Sen. Rand Paul (R-Ky.) announced over the weekendthat he would vote for it.
In addition to Paul, Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska) and Thom Tillis (R-N.C.) have said they will vote for a resolution of disapproval.
Timing: The Senate will vote on the resolution before lawmakers leave town on March 15 for a weeklong recess.
Hold on: Trump has vowed to veto the resolution. Supporters of the resolution don’t have the two-thirds needed to override him
The Hill’s Jordain Carney has more here.
US, China close to trade deal according to reports: The U.S. and China are reportedly close to a trade deal that would lift U.S. tariffs on Chinese goods in exchange for Beijing making several economic pledges.
Reuters, citing a source briefed on negotiations, reported Sunday evening that the U.S. would lift tariffs on at least $200 billion worth of Chinese goods under the deal, while China would lift retaliatory tariffs against the U.S. and make pledges for economic reform.
The source told Reuters that China had reserved a 10-day window around March 20 for a possible summit with the U.S. to announce a trade deal. President Trump has previously teased a potential meeting with Chinese President Xi Jinping, saying last month that it would occur in March and be held at his Mar-a-Lago resort in Florida.
The Wall Street Journal reported that the summit could be held around March 27.
New debt showdown begins for Trump, Democrats: An extension of the nation’s debt limit ran out on Saturday, starting the clock for a potentially painful negotiation between the Democratic House and President Trump on raising the nation’s borrowing limit.
The government has until sometime after mid-summer to raise the legal cap on how much the federal government can owe creditors.
{mossecondads}The Treasury Department on Friday suspended the sale of certain bonds and began a series of accounting maneuvers, known as “extraordinary measures” that will keep the U.S. government’s nearly $22-trillion debt beneath the legal limit. Those methods are expected to give lawmakers until August or September to cut a deal before the U.S. misses a debt payment. I explain what happens next here.
GOOD TO KNOW
- U.S. construction spending fell in December amid a broader end-of-year slowdown in the American economy, according to Census Bureau data released Monday.
- Rand Paul (R-Ky.) predicted on Sunday that the Supreme Court will likely strike down the emergency declaration, adding that the president’s actions went against “the will of Congress.”
- President Trump reportedly directed his former economic adviser, Gary Cohn, to pressure the Justice Department to block the AT&T-Time Warner merger, according to a report in The New Yorker.
- Leaders of the Business Roundtable and the Council of Institutional Investors on Monday pushed back against proposals to put restrictions on stock buybacks.
ODDS AND ENDS
- Op-Ed: Gregory Daco, chief U.S. economist at Oxford Economics, argues why “recession predictions could become self-fulfilling prophecies.”