Daily Deduction Requiring Notice, Needing A Breakthrough
Renu Zaretsky
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Looking for a “breakthrough.” The House passed another temporary federal government funding bill through Dec. 20. But agreeing on a permanent bill may not be so easy.  Senate Budget Committee Chair Richard Shelby says “impediments” have come up in negotiating top-line spending numbers for 12 appropriations bills. They’re familiar: ”It’s not just the allocations, it's dealing with the wall,” said Shelby. 

Ways & Means must give President Trump heads up if it requests his state tax returns. A federal judge ruled this week that congressional committees must give the court and the president 14 days notice of their intent to seek state tax returns from New York. The court would use the time to determine whether the request is acceptable. 

Those wealth taxes would hit high-income—but not super-wealthy—taxpayers in blue states. Some Democratic presidential candidates would  change or remove the earnings cap for Social Security payroll taxes. This means taxpayers could face a new 12.4 percent tax on earnings over $250,000. The 12 states with the highest share of earners who would owe additional payroll taxes if the cap were lifted all voted for Hillary Clinton in 2016. They  include New Jersey, Connecticut, and Massachusetts. 

Tax inheritances to reduce inequality. Henry Aaron of the Brookings Institution argues that an inheritance tax is inherently fair and encourages the division of estates among multiple inheritors. “A more aggressive inheritance tax would yield still more.  If inheritances above $1 million were included in the income tax and the minimum tax rate was 40 percent, the tax would yield nearly $1 trillion, four times the estimated revenue from the current estate tax.”

IRS/TPC Research Conference Call for Papers, due December 2. The 10th Annual IRS/TPC Research Conference on Tax Administration will take place on June 18, 2020. Proposals for papers are due on December 2, 2019. Subjects include measuring and influencing taxpayer compliance, estimating costs of compliance, tax complexity, improving tax administration, and understanding the nature and behavior of taxpayers. More information on the call for papers and submitting a proposal is here.

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