The National Pulse

This Week in Economics: 4 News Stories You Need to Know About

Here is an update on some of the recent stories that I have covered for The National Pulse:

1.) D.C. City Council unanimously votes to raise taxes on Uber…and a ton of other things.

The Washington Times reports:

The 13-member council approved funding Metro by raising the tax on ride-hailing services Lyft and Uber from 1 percent to 6 percent, as well increasing the sales tax, the car rental and leasing tax, the hotel sales tax, and the tax on alcohol sold in liquor stores. Owners of properties assessed at more than $5 million will pay an increased 24 cents per $100 of value.

For more on why D.C.’s Uber tax is unconscionable, click here.

2.) Laffer Curve at work: Federal revenues soar after Trump tax cut.

From Investor’s Business Daily:

According to the latest monthly report from the Congressional Budget Office, revenues in April totaled $515 billion — a 13% increase over last April and an all-time high for the month.

For the current 2018 fiscal year, which started last October, revenues are $83 billion higher than they were the year before — an increase of 4.3%. That’s a faster rate of growth than occurred during President Obama’s last years in office.

Individual taxes, the CBO report says, are up 11.5% so far this fiscal year, and payroll taxes are up 2.8%. Both are signs of a healthy labor market, which is creating more jobs, higher wages and, as a result, more tax revenues. Those gains, the CBO says, more than offset the 22% decline in corporate income taxes.

In other words, in a fiscal year that’s seven months old (four of which were after the tax cuts went into effect), federal revenues are higher than ever.

Or, to put it another way, it looks like those of us who predicted the pro-growth tax cuts would at least partially pay for themselves through increased economic growth were correct.

All the more reason to dismiss the doomsday talk that Trump’s tax cuts are “blowing up the debt”.

3.) Dow rises after U.S. and China announce a trade war truce.

From USA Today:

U.S. stocks powered higher Monday after President Trump’s top Treasury official said the trade war with China is “on hold,” a truce that removed a big risk from the market for now.

One of the biggest obstacles facing stocks in recent weeks has been fear that a full-blown trade war with China, the world’s second-biggest economy, would break out and cause global growth to slow and corporate earnings to shrink. But over the weekend, Steven Mnuchin, the U.S. Treasury Secretary, cited “progress” in trade talks and said the economic rivals were “putting the trade war on hold.”

Wall Street cheered signs that talks between the two countries were moving closer to an agreement that would not do harm to markets or the global economy.

To keep the stock market rally going, here’s why we should index capital gains to inflation.

4.) Internet sales tax fight moves to the Supreme Court.

From CNS News:

At a small business expo hosted by eBay in Washington D.C. on May 16, several small business owners told CNSNews.com that they opposed the idea of an Internet sales tax, calling the idea “devastating” and saying it would “put us out of business.”

In April, the Supreme Court heard oral arguments in South Dakota v. Wayfair… “It’s just not fair for the heavy burdens that it places on small businesses like us to have to reach out to 9,600 different jurisdictions to file tax,” Michael Swoape, the owner of One4Silver told CNSNews.com. “It would really be devastating.”

[…]

The Supreme Court ruled in 1967 that states could not force mail-order catalog companies to collect sales taxes unless the company had a physical presence in the state. They reaffirmed that ruling in Quill Corp. v. North Dakota  in 1992.

For more on why the Internet sales tax is a terrible idea, click here.

Jonathan Decker

Jonathan Decker is the Chief Economic Correspondent for TheNationalPulse.com.