President Trump renews pledge to eliminate taxes on tips. During a speech in Las Vegas, President Donald Trump reiterated his intention to follow through on his campaign promise to eliminate taxes on tips. While a detailed proposal has not yet emerged, exempting tips from federal income taxes could cost $6.5 billion in 2025, according to TPC estimates.
IRS funding faces a critical crossroads in fiscal year 2026. TaxNotes reports (paywall) on the latest House Republican efforts. They are looking to roll back much of the Inflation Reduction Act’s $78.9 billion IRS funding, and the upcoming fiscal 2026 budget cycle could determine the agency's near-term fiscal future. TPC's Janet Holtzbatt offers a reminder that IRS research and development efforts have led to improvements in taxpayer service and administrative efficiency. Meanwhile, President Trump has suggested terminating thousands of IRS agents or redeploying them to the US-Mexico border, reports Newsweek.
Who’ll end up paying for extending the Tax Cuts and Jobs Act? CBS News reports on Congressional Republicans’ plans to extend the 2017 Tax Cuts and Jobs Act. Potential revenue offsets include higher tariffs, spending cuts, and eliminating tax breaks like the mortgage interest deduction and the student loan interest deduction. TPC’s Joe Rosenberg noted that extending the tax cuts while enacting tariffs and cutting Medicaid "will deliver benefits more among higher-income households, and more of a cost will be borne by lower-income households."
Tax season opens today, bringing financial anxiety for many. Many Americans, especially millennials and Gen Z, are feeling the pressure. A recent Credit Karma survey found that 37 percent of taxpayers rely on their refunds to make ends meet, and nearly half of millennials expect to use their refunds to pay down debt. Filing complexities and refund uncertainties continue to stress taxpayers. Twenty-seven percent of those surveyed are worried they may not be to afford their tax bill, if they end up owing extra upon filing.
Idaho proposes income tax reductions. Idaho House Speaker Mike Moyle introduced House Bill 40, which would lower individual and corporate income tax rates, expand exemptions for military pensions, and eliminate capital gains tax on gold bullion sales. The measures could cost the state $253 million.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky.
