The price of tax cuts: How much is too much? As Republicans consider renewing the Tax Cuts and Jobs Act of 2017 (TCJA), a nearly $5 trillion price tag has ignited internal party conflicts, reports Politico. House Budget Committee Chair Jodey Arrington (R-TX) wants to offset costs with spending cuts, such as reducing Medicaid funding and rescinding green energy tax breaks. Meanwhile, Sen. Mike Crapo (R-ID) is among those who supports bypassing fiscal concerns and using a “current policy” baseline that assumes the TCJA would be extended. President-elect Trump has proposed additional tax cuts funded in part by tariffs, a pay-for on which many Republicans are concerned about relying too heavily, reports Semafor.
Budget reconciliation is on the horizon. Congressional Republicans are preparing to use the budget reconciliation process early next year to renew the TCJA and implement federal spending cuts. The GOP also wants to fund border enforcement and President-elect Trump’s plans for deportations and repeal Biden-era clean energy initiatives, reports NBC News.
What’s missing in Ramaswamy and Musk’s “DOGE” effort? TPC’s Howard Gleckman argues that President-elect Trump’s picks to head the Department of Government Efficiency (DOGE), Vivek Ramaswamy and Elon Musk, may not have an accurate understanding about the work of federal civil servants and the percentage those labor costs account for among all federal spending.
State revenue growth remains weak amid economic uncertainty. After two years of robust pandemic-driven revenue growth, state revenue growth slowed significantly in fiscal years 2023 and 2024, says TPC’s Lucy Dadayan in the latest State Tax and Economic Review. While many states have cut taxes, temporary boosts from federal aid and strong market performance have faded, leaving states with weaker-than-expected collections. Economic uncertainty and the unclear future of the TCJA could complicate forecasting efforts in the short term.
Grint and bear it? No magic spell for "Harry Potter" star’s tax bill. Rupert Grint, who played Ron Weasley in the Harry Potter movie franchise, must pay $2.3 million after losing a long-standing legal battle with British tax authorities. The dispute centered on whether Grint’s $5.8 million in movie residuals should be taxed as income or a lower-taxed capital asset. A court ruled that the funds were earned directly from his acting work and therefore taxable as income.
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