GAO: Federal government debt is on an unsustainable path. The Government Accountability Office projects the public debt will top 200 percent of Gross Domestic Product by mid-century. The increase will be driven largely by Social Security and Medicare spending. But GAO warns that due to a combination of rising debt levels and higher interest rates, interest on the debt will increase from 8 percent of government spending in 2019 to 27 percent by mid-century.
Is cryptocurrency a good 401(k) investment? Sens. Elizabeth Warren and Tina Smith told Fidelity CEO Abigail Johnson they are concerned about the company adding a bitcoin option for its 401(k) investors while it has its own cryptocurrency mining operation. They asked Johnson to explain why Fidelity ignored Labor Department’s concerns about the dangers of cryptocurrency in 401(k) plans. They called crypto “a risky and speculative gamble.”
Speaking of retiree income: There’s an elephant in the room. TPC’s Gene Steuerle warns about the growing gap between federal retiree benefits and taxes paid. Closing that gap “requires some combination of tax hikes and reduction in the rate of growth of future benefits.” Gene says neither presidents nor Congress are willing to admit they made “promises that couldn’t be kept.”
Is a minimum tax on corporations still on Biden’s agenda? Congressional Democrats continue to discuss a smaller but still mammoth climate, social spending, and tax bill. Some progressives, including Sen. Warren, still hope the Senate can agree to a minimum tax on corporate book income, while keeping the corporate tax rate at 21 percent.
Minnesota lawmakers still split on tax cuts. The House passed a $1.6 billion tax cut for this year, with more in the future, through a mix of tax credits, refunds, and rebates. But the Senate’s plan would eliminate the tax on Social Security income and reduce the state’s bottom income tax rate from 5.35 percent to 2.8 percent. Negotiations continue.
Kansas Gov. Laura Kelly signs tax relief bill. The legislation provides $1 billion in tax relief over three years. It cuts property taxes and provides additional property tax refunds to veterans and older adults. It also gives tax credits to teachers who use their own money to purchase school supplies.
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