A complex law meets a shrinking IRS. TPC’s Janet Holtzblatt highlights how dozens of new tax provisions in the reconciliation law will require regulatory clarification—but IRS enforcement and guidance resources are under pressure. The Inflation Reduction Act’s multiyear IRS funding boost is being rolled back, and President Trump has proposed cutting IRS enforcement funds by 34 percent. Holtzblatt argues that these cuts could reduce taxpayers’ access to clear guidance and certainty, particularly for low- and middle-income filers, while high-income individuals and large corporations are more likely to afford private rulings and pre-filing assistance.
Trump’s new auto loan interest deduction could benefit millions, maybe. Under the new tax law signed by President Trump on July 4, some taxpayers can deduct interest paid on new car loans, even if they don’t itemize. The deduction is limited to new, American-assembled vehicles for personal use purchased starting this year, and it phases out for individuals earning more than $150,000 and couples earning more than $250,000. According to Cox Automotive, roughly 3.5 million loans could qualify. Jonathan Smoke, the firm’s chief economist, estimates a typical buyer might save $2,200 over four years, though the savings could be modest compared to the price of a new car.
Capital gains tax rates hold steady, but breaks multiply. The new tax law left the top capital gains tax rate unchanged at 23.8 percent, but it expanded two key tax breaks that could significantly reduce capital gains liability for investors. The law made the Opportunity Zones tax break permanent, offering new incentives for long-term investments in rural and low-income areas, and enhanced the Section 1202 exclusion for qualified small business stock. Together, the changes are expected to save taxpayers $58 billion over the next decade. While some economists see these policies as investment stimulants, others question whether they simply add complexity and disproportionately benefit high earners, reports The Wall Street Journal.
New Arizona law offers property tax refunds for homelessness-related costs, but nobody’s been paid yet. Arizona’s Proposition 312 allows property owners to apply for partial refunds of property taxes if they incur costs from homelessness-related nuisances like encampments, loitering, or drug use. But so far, no refunds have been issued. Of the more than two dozen applications received, many are incomplete or duplicative, and local governments are still working out review procedures. Legal experts say ambiguities in the law could lead to courtroom battles over eligibility and documentation. Supporters, like the Goldwater Institute, are encouraging applicants to keep trying.
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