Professor Shanske Comments on Tax Bill for BBC, NPR, Huffington Post, New York Times

Professor Darien Shanske commented for media including the BBC, the National Public Radio program Marketplace, the Huffington Post, and the Los Angeles Times on the Republican-sponsored tax bill passed this week by Congress.

In addition, “The Games They Will Play: Tax Games, Roadblocks, and Glitches Under the New Legislation,” a research paper on the tax legislation that was co-authored by Professor Shanske, drew coverage in the New York Times, The New Yorker and the Washington Post. The paper has drawn more than 37,000 downloads since being published online on December 7. An update of the report, released December 18, has almost 16,000 downloads.

In an interview broadcast on BBC, Professor Shanske talked about how the tax measure significantly lowers tax rates on corporations and other business entities, provides a moderate, temporary tax cut for middle income earners, and substantially increases taxes for a number of people who have moderate to high income in the form of salary and live in states with progressive income taxes. Shanske said it was unlikely that the tax breaks provided to corporations and wealthy individuals would spur job creation and “trickle down” to the middle class and the poor.

On NPR’s Marketplace, Professor Shanske discussed how individuals and states may respond to the changes in the tax code, which repeals the deduction for state and local income taxes (SALT). States are likely to take steps to preserve the value of the deduction for their residents by shifting from no longer deductible taxes to sources of revenue (e.g., charitable donations) that remain deductible. 

Speaking with the Huffington Post, Shanske addressed questions of whether Republicans in Congress would take steps to reduce the budget deficits that will be much larger than anticipated. “They clearly don’t care about the deficit,” said Shanske.

Speaking with the McClatchy News Service, Professor Shanske described the ways in which the new tax law will affect taxpayers. The biggest changes lie in the ways the tax code will treat businesses, such as corporations. “For a long time, the top corporate income tax rate was about the same as the top personal income tax rate,” Shanske said. Under the new law, the top individual rate drops to 37 percent, but the corporate rate is lowered more significantly to 21 percent, and so individuals who have the ability to keep their income within a corporation will save a lot of money.

Darien Shanske is a Professor of Law at UC Davis. His academic interests include taxation, particularly state and local taxation, local government law, public finance, and political theory, particularly jurisprudence.

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