Tune in at Noon today: What happens if Congress doesn’t raise the debt limit? Join TPC co-founder Len Burman on the next episode of The Prescription. He’ll talk with TPC’s Howard Gleckman at 12:00 today about the potentially devastating impact of Congressional inaction. There’s got to be a better way to run the government, right?
Still fighting inflation, Fed announces another (smaller) rate increase. As expected, the Federal Reserve raised rates by a half percentage point to a range of 4.25 to 4.5 percent, the highest since 2007. (The past four increases have been 0.75 percentage points.) It expects core inflation to moderate to 3.5% by the end of next year, still well above its target of 2 percent and higher than the 3 percent it projected in September. It expects real Gross Domestic Product, adjusted for inflation, to rise by about 0.5 percent this year and by less than 1 percent next year. Not a recession but very slow growth.
Congress has options to improve the child tax credit for low-income families. Absent full refundability that would allow low-income families to qualify for the maximum credit regardless of how much they earn, Congress has several alternatives. TPC’s Elaine Maag outlines the alternatives. It could: Repeal the earned income threshold, allowing families to calculate their benefit on all their earnings, rather than excluding the first $2,500; repeal the limit on how much of the credit could be received as a refund; or phase in the credit faster. Or, it could do all of the above.
Hint: If you defraud the government, you may not want to brag about it on YouTube: A rapper who calls himself “Nuke Bizzle” was sentenced to 77 months in federal prison and ordered to pay $704,760 in restitution after pleading guilty to multiple crimes, including defrauding the Pandemic Unemployment Assistance program. The rapper, whose real name Fontrell Antonio Baines, was charged in California. Baines boasted about the scam in his YouTube music video called "EDD." The video features him filing a claim with California's Employment Development Department (EDD) on a laptop. The EDD logo appears on the screen throughout the nearly three-minute-long video.
National Taxpayer Advocate: A no-audit pledge is not ideal. Treasury Secretary Janet Yellin promised that audits funded with $80 billion in new money will focus on those with incomes exceeding $400,000. But National Taxpayer Advocate Erin Collins said taxpayers with less income may have taken that to mean they will not be audited. That’s not the case, and taxpayers’ misinterpretation is cause for concern. About 95 percent of taxpayers fall below $400,000, and the voluntary tax system requires people to feel the still-real potential of an audit.
The World Health Organization (WHO) calls on countries to tax sugar-sweetened beverages. The WHO released its first global tax manual for sugary beverages this week. At least 85 countries tax such beverages. The manual is a reference guide countries can use to develop, design, and implement such taxes.
Denmark’s new coalition government announces tax cuts, mostly. It plans to lower most taxes in order to boost economic growth, but Prime Minister Mette Frederiksen noted additional plans for a new “top-top tax.” The 5 percent surtax would be levied on annual incomes exceeding $358,000.
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 at [email protected].
