Fewer voters are noticing bigger paychecks post-TCJA. According to the latest poll of registered voters by Politico/Morning Consult, only about one-fifth of respondents reported seeing more in their paychecks after passage of the Tax Cuts and Jobs Act. Fewer in April said they had more take home pay than in the February survey. The April poll found that 22 percent saw paycheck increases, while 55 percent said they had no bump in pay. Almost one-third didn’t notice or had no opinion. Support for the law remains heavily skewed by political party: 80 percent of Republicans back the law, while only 17 percent of Democrats support it. The share of independents favoring the law increased slightly to 41 percent.
Do you hear the drumbeat for a capital gains tax cut? Right now, investors pay capital gains taxes on the difference between their cost of purchasing an asset and sales price (with some other adjustments). Some conservative lawmakers and some in the White House want to index capital gains for inflation: A person would pay taxes on the difference between the value of the sold asset and its inflation-adjusted purchase price. Capital gains indexing would reduce tax revenue by about $100 billion over 10 years, according to the Penn Wharton Budget Model. And TPC’s Len Burman notes that while indexing “seems appealing on its face,” it ignores other aspects of capital income and expense, such as debt.
The House Ways & Means committee wants to know why IRS systems failed on Tax Day. A bipartisan group has written a letter to the IRS wanting to “understand how this significant disruption of service transpired.” The IRS has until May 4 to answer their questions, including whether software issues compounded the hardware failure, how old the failed technology was, how the IRS identified and fixed the issue, and whether any taxpayer data was compromised.
Virginia’s senators want the Trump Administration to help mitigate a TCJA effect on relocating federal employees. The new tax law eliminates the deduction that federal employees could take for the costs of relocating and moving household items. Now, those workers have to pay income tax on the amount they were reimbursed for those moving expenses. The Senior Executives Association says as many as 25,000 federal employees relocate each year for their jobs. Some now face income tax bills totaling $3,500 to $6,000.
There’s yet another take on a telephone tax scams. The IRS warns that thieves are using telephone numbers that mimic those of the IRS Taxpayer Assistance Center (TAC). They call unsuspecting taxpayers and try to trick them into making debit card payments on fake tax bills. Word to the wise: TAC staff provide filing help for taxpayers. And the IRS never calls taxpayers to demand payment for tax bills.
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