A temporary spending bill is in the works. House Democratic leaders hope to take up a temporary spending bill when they return to the Capitol next week. They have to move quickly, since Congress must pass a continuing resolution before Oct. 1 or risk, yes, a government shutdown. The bill would extend government funding levels through Dec. 16, when Congress is due to adjourn. The House also will have to work out an agreement with the Senate.
Tune in Thursday at Noon for TPC’s Prescription webcast with former IRS Commissioner John Koskinen. He’ll discuss how the IRS should spend the $80 billion in new funding it will receive through the Inflation Reduction Act, including challenges the IRS faces as it looks to increase staff and improve technology. Register and tune in here.
Speaking of IRS funding… TPC’s Howard Gleckman and Janet Holtzblatt share the facts about IRS audits and agents and raise key questions about IRS hiring. They clarify the disinformation, misinformation, and no information about how the IRS will spend that $80 billion.
Congress could end tax breaks for gifts to nonprofits with political agendas. Following the disclosure that Chicago businessman Barre Seid gave $1.6 billion, tax free, to a political advocacy group, TPC’s Steve Rosenthal says the tax loophole can be closed. He suggests Congress extend to social welfare organizations the special tax rule that treats a gift of appreciated property to political organizations as a sale and subject to capital gains taxes. Or, it could impose gift taxes on property given to 501 (c)(4) social welfare or political organizations.
Immigrants were less likely to get the expanded CTC. Those who did bought essentials. TPC’s Elaine Maag and Laura Brugger of Washington University write about results of a recent survey conducted by Washington University and Appalachian State University. Compared to non-immigrant parents, immigrants were less aware of the 2021 expanded child tax credit (CTC) and less likely to have received it. Those who got the credit used it in similar ways as native-born parents, with one exception: Immigrant parents were more likely to invest in their child’s future, such as by building a college fund.
Flush with cash, some states make tax cuts permanent. Associated Press tracks states that have cut income tax rates, expanded tax deductions, cut property taxes, reduced other taxes, or offered immediate tax rebates, thanks to federal pandemic aid and surging state tax revenue. Georgia, Indiana, Idaho and South Carolina have made their tax cuts permanent.
Which states might tax federal student loan forgiveness? CNBC reports on the Tax Foundation’s estimate using the latest state updates. Arkansas, Minnesota, Mississippi, North Carolina, and Wisconsin may tax student loan forgiveness just announced by President Biden. Massachusetts has not yet determined whether it will tax the debt forgiveness. The debt write-offs are exempt from federal income tax.
Tories pick Truss, who backs tax cuts, as British PM. Conservative party voters chose Liz Truss to succeed Boris Johnson as Prime Minister. Truss made unspecified tax cuts a centerpiece of her campaign, in sharp contrast to her rival, former Finance Minister Rishi Sunak. He would have delayed tax cuts until inflation is brought under control. Truss’s likely Finance Minister says there will be “some fiscal loosening” but insists the government will act in a “fiscally responsible way.”
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