The new House will start work this week by moving to cut IRS funding. After 15 contentious votes over four days, Rep. Kevin McCarthy was elected the 55th Speaker of the House early Saturday morning. In his inaugural speech, McCarthy vowed the chamber’s first bill “will repeal the funding for 87,000 new IRS agents.” The bill may be useful political messaging for the GOP base but has no chance in the Democratic-controlled Senate.
Other items of House business. Now that Republicans finally picked a Speaker, their next items of business include setting rules, selecting committee members, and picking committee chairs. Three lawmakers are vying to chair the House Ways & Means Committee, and several new GOP lawmakers will join the panel.
The IRS finally corrected 2020 overpayments for unemployment benefits. The agency issued 12 million tax refunds worth $14.8 billion. The average refund is $1,232. The American Rescue Plan Act of 2021 excluded up to $10,200 in 2020 unemployment benefits from taxable income, but many filers submitted before the exclusion went into effect.
Minnesota Gov. Tim Walz still is pushing tax rebates. Despite a $17.6 billion surplus, fellow Democrats gave only lukewarm support last year for his proposed $1,000 rebates for individual filers ($2,000 for joint filers). He’ll propose the idea again later this month but says the tax rebates will be smaller this time. He believes “that a little bit of the surplus could really help.”
Idaho legislature convenes today, property tax relief may be on the horizon. Idaho’s estimated budget surplus is more than $1.5 billion. Since the legislature cut individual and corporate income taxes in September, property tax relief could be a focus this year. Lawmakers also will decide how to use a $410 million annual increase in education funding thanks to a sales tax increase passed last fall; $330 million is earmarked for K-12 public education.
Want the latest tax news delivered to your inbox on weekdays at 8:00 am? (Mondays only when Congress is not in session.) Subscribe here to TPC’s Daily Deduction. Email tips on new research or other news to Renu Zaretsky at [email protected].
