IRS instability hurts both service and enforcement. In new testimony before the House Subcommittee on Delivering Government Efficiency roundtable, TPC’s Janet Holtzblatt argued that years of funding swings and staffing losses have made it harder for the IRS to deliver reliable taxpayer service and enforce the law effectively. She said net staffing fell about 20 percent in 2025, likely leaving taxpayers with less help this filing season and more delays, especially for paper returns, flagged filings, and people without direct deposit. Her broader point: Modernizing the agency will take both better technology and experienced staff, backed by stable funding and stronger oversight.
Higher taxes on the rich could boost demand for municipal bonds. A new Bloomberg analysis (paywall) says new state efforts to tax high-income or high-wealth households may have an important side effect: making tax-exempt municipal bonds more attractive to wealthy investors. That dynamic is especially relevant in states such as Washington and Maine, which have recently enacted or approved higher taxes on top earners, and in Minnesota where lawmakers are weighing a wealth tax. Because interest on in-state municipal bonds is generally exempt from state income tax, higher top rates can increase the value of that tax shelter and strengthen local demand for those bonds.
Customs opens first phase of IEEPA tariff refunds. US Customs and Border Protection has started the first phase of its refund process for tariffs imposed under the International Emergency Economic Powers Act after the Supreme Court ruled those levies unlawful. For now, the process applies only to certain unliquidated entries and some entries within 80 days of liquidation, and Customs says refunds will generally be issued 60 to 90 days after a valid claim is accepted. That is a significant step for importers, since the Court of International Trade has said roughly $165 billion in IEEPA tariffs must be refunded with interest.
Shippers begin filing tariff refund claims for customers. Major shipping companies are already moving to help customers recover illegal tariffs. UPS, FedEx, and DHL all say they have begun filing refund claims with Customs for shipments where they were the importer of record, though they also caution that it could take months before money actually reaches customers. That delay matters because the new portal only covers certain IEEPA tariffs and the first phase is still limited in scope. President Trump said in a CNBC interview that he would gratefully “remember” companies that choose not to seek refunds for tariffs the Supreme Court has ruled illegal.
Gov. Stein pitches a family-focused budget and urges pause on tax cuts. Gov. Josh Stein (D-NC) has unveiled a new North Carolina budget proposal centered on teacher pay, child care, housing, public safety, and targeted tax relief for working families. His plan includes a childcare tax credit, a working families credit worth up to $800 a year, a back-to-school sales tax holiday, and a larger standard deduction. But Stein is also urging lawmakers to pause scheduled tax cuts that he says could create a $5 billion budget shortfall if the state does not act.
Missouri voters will decide whether to shift from income taxes to sales taxes. Missouri lawmakers have sent voters a proposed constitutional amendment that would let future legislatures expand the sales tax to more goods and services to phase out the personal income tax. Supporters say the change would make the state more competitive and eventually let families keep more of what they earn. Opponents say it would shift more of the tax burden onto lower- and middle-income households, since sales taxes hit necessities that people cannot easily avoid. The proposal now heads toward a statewide vote later this year.
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