Don’t ask about Child Tax Credit? President Biden and Senate Democrats still are trying to pass Build Back Better before Christmas. But Sen. Joe Manchin continues to press for spending reductions and more modest tax cuts. Multiple news outlets report talks between Biden and the senator are at an impasse. Among other concerns, Manchin reportedly continues to object to a one-year extension of the expanded Child Tax Credit. With BBB seemingly stalled, some Senate Democrats are looking to pivot to a voting rights bill.
How is Treasury advancing racial and ethnic equity analysis in tax policy? Deputy Secretary Wally Adeyemo and Assistant Secretary for Tax Policy Lily Batchelder updated that work, part of a presidential initiative aimed at assuring federal policy responds to race and ethnicity. Treasury’s Office of Tax Policy (OTP) used data to improve distribution of economic stimulus payments, adding about 26 million payments to those who did not file tax returns. OTP also is developing an empirical methodology to analyze equity implications of tax policy and administration. That effort requires IRS to better associate race with individual tax records.
President Biden’s wants IRS to transform federal customer experience. A broad, administration-wide executive order aims to improve federal customer experience and service delivery. Treasury is required to create online tools and services to ease tax payments and improve telephone-based taxpayer assistance. That includes a feature that allows taxpayers to request callbacks instead of waiting on hold and, often, being hung up on. The order also urges Treasury to consider expanding automatic direct deposit refunds, tax credit eligibility tools, and expanded electronic filing options.”
The Fed plans three interest rate hikes next year. With concern over inflation growing, the Fed signaled it will end its asset purchase program sooner than planned and raise rates as much as three times during 2022. However, the Fed said it would keep interest rates close to zero until it feels the economy is closer to full employment. The Fed action should take some pressure off fiscal policy.
ProPublica’s deep dive into dynastic wealth in the US. The nonprofit news agency’s Secret IRS Files project reviews the tax policies that allowed three wealthy families to avoid paying taxes on their assets for generations. Tax historian Joe Thorndike calls the coverage “one of the most historically informed treatments of the estate tax” that he’s ever seen in mainstream journalism.
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