CBO says new law will increase the deficit. The Congressional Budget Office (CBO) estimates that the budget reconciliation act enacted on July 4 (Public Law 119-21) will increase the unified federal budget deficit by $3.4 trillion between 2025 and 2034, relative to the agency’s January current law baseline. The agency projects the law will reduce direct spending by $1.1 trillion and reduce revenues by $4.5 trillion.
House bill proposes $9.5 billion for the IRS next year. A draft of the fiscal year 2026 spending bill from Rep. David P. Joyce (R-OH) would allocate $9.5 billion to the IRS, including $2.78 billion for taxpayer services, $3 billion for enforcement, and $3.75 billion for operations support, reports TaxNotes (paywall). This would represent more than a 20 percent decrease in IRS funding from the current fiscal year and less than the agency’s $9.8 request just a month ago.
Ohio House moves to limit some local levies—but stops short of broader reform. The Ohio House voted to override Gov. Mike DeWine’s (R) veto of a provision barring school districts and local governments from placing replacement or emergency levies on ballots. The override now heads to the Senate. Meanwhile, lawmakers delayed votes on two other vetoed proposals: one would allow county budget commissions to reduce voter-approved levies, and the other would adjust the "20-mill floor" funding formula, reports The Columbus Dispatch.
Federal school-choice tax credit law sparks state-level dilemmas. The recently passed federal tax law includes a provision allowing taxpayers to claim up to $1,700 in dollar-for-dollar credits for donations to scholarship-granting organizations that fund private school tuition. But states must opt into the program, and Democratic governors are under pressure to reject it. Supporters argue it expands educational options; opponents say it threatens public school funding. The credit, estimated to cost $25.9 billion through 2034, takes effect in 2027. The Wall Street Journal offers a comprehensive look (paywall).
New book sheds light on America’s complicated tax attitudes. MIT political scientist Andrea Campbell’s Taxation and Resentment explores why Americans say they favor progressive taxation in theory but often support regressive taxes like sales taxes in practice. Drawing on decades of public opinion data and new surveys, Campbell shows that perceptions of fairness, transparency, and complexity shape how people feel about different kinds of taxes. MIT News shares her findings.
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