Topic: Use Tax

Despite the official Davos focus on environmental and social governance (ESG), the primary topic of discussion among CEOs was the strength of the US economy. President Trump attributes this success to tax cuts and, more importantly, significant deregulation. He claims the US consumer has never been wealthier, though the hosts suggest this wealth may actually be record-level debt.

The U.S. Senate passed a major tax reform bill in a 51-48 vote, moving the legislation toward a conference committee to reconcile differences with the House version. The bill includes a sunset clause for middle-class tax breaks in 2025 and has faced criticism for adding to the national deficit. A viral Facebook post from a disgruntled citizen is read to illustrate the intense emotional and political polarization surrounding the legislation.

U.S. Treasury Secretary Jack Lew expressed outrage over the European Commission's ruling against Apple, arguing the move infringes on American tax jurisdiction. Critics point to Lew's history as a former Citigroup executive during the 2008 financial crisis as context for his protective stance toward multinational corporations. The U.S. government fears the EU ruling will allow companies to offset European payments against American tax liabilities, reducing domestic revenue.

The CEO of US Airways complained that airlines are taxed at 20%, a rate higher than that of "vices" like alcohol or tobacco. This leads to a broader discussion on the IMF's proposals for global carbon taxes and the hosts' ongoing analysis of a potential "wealth tax" as a solution to national debt.

A resident of California received a surprise "use tax" bill for 9.7% of the value of art shipped from the Netherlands for an expo. The tax applies to items purchased over the internet or from out-of-state sources, functioning similarly to a sales tax. The recipient describes the difficulty of fighting the bill even after the unsold items were shipped back to the artist.

The California "bottle bill" is characterized as a hidden tax on consumers pushed by CalPIRG and US PIRG. The discussion asserts that most glass was already being recycled by factories before the legislation passed. Criticism is directed at the 501(c)(3) organizations for their lack of financial transparency and their alignment with corporate lobbying interests despite claiming to represent the public.