Tuesday, October 19, 2021
Letter To Senate Finance Committee On H.R. 5376:
We are teachers, scholars, and practitioners in the fields of tax law, property law, natural resource management, and land use law. We write today to express our deep concern about a provision recently added to the Charitable Conservation Easement Program Integrity Act, that is now part of H.R. 5376, the “Build Back Better Act” (the reconciliation bill). This provision, if enacted into law, would open the door to widespread abuse of the charitable deduction for conservation easements and lead to a massive waste of taxpayer dollars. We urge you to omit the same or comparable language from a Senate bill and to work to ensure that it is not included in the final legislation.
October 19, 2021 in Congressional News, Tax, Tax News | Permalink
Monday, October 18, 2021
Congressional Budget Office, Monthly Budget Review: September 2021:
Total Receipts: Up by 18 Percent in Fiscal Year 2021 ...
Chris Edwards (Cato Institute), Federal Tax Revenues Soar:
New data from the Congressional Budget Office show that federal tax revenues are soaring. Despite the Republican tax cuts of 2017 and the ongoing pandemic, taxes are pouring into the U.S. Treasury. ...
The chart below shows the major sources of federal revenues from fiscal 2000 to fiscal 2021, which ended September 30. The GOP tax cuts were effective January 2018, which was part way through fiscal 2018. ...
October 18, 2021 in Congressional News, Tax, Tax News | Permalink
Thursday, May 13, 2021
The Joint Economic Committee held a hearing yesterday on Examining the Racial Wealth Gap in the United States:
- Mehrsa Baradaran (UC-Irvine) (testimony: "Unless targeted by concentrated and effective public policy coordinated across federal, state, and local governments, historic injustices that created the racial wealth gap will compound the gap. This testimony suggests several steps that can be taken to close the gap, which include housing, jobs, and childcare programs. This testimony also proposes that these efforts be coordinated, tracked, and measured across government agencies through a dedicated task force or agency established for a limited amount of time for the sole purpose of closing the racial wealth gap. Such a task force can be built within the existing federal administrative state. For example, the Minority Business Development Agency (MBDA) can be used for such a coordinating purpose. ")
- Dorothy A. Brown (Emory) (testimony: "In my testimony today, I will discuss three ways that tax policies are increasing the racial wealth gap. The first looks at the tax breaks for marriage. The second looks at tax breaks for paying for college. The third looks at tax breaks for gifts and inheritances. But if there is one thing that I hope you take away from what I will be sharing with you is that the racial wealth gap will not be eliminated without a fundamental change in our tax laws.")
- Darrick Hamilton (The New School) (testimony: "Reparations provides a retrospective, direct, and parsimonious approach to address the black-white racial wealth gap; moreover, it is a racially just policy because it requires the U.S to take public responsibility and atone for its long history of racial injustice.")
May 13, 2021 in Congressional News, Legal Education, Tax | Permalink
Tuesday, April 27, 2021
The Senate Finance Committee's Subcommittee on Fiscal Responsibility and Economic Growth holds a hearing today on Creating Opportunity Through a Fairer Tax System at 2:30 PM ET (live video here):
- Abigail E. Disney (CEO & Co-founder, Fork Films, New York), Testimony:
I will go to bat for the wealth tax with any and all businessmen who want to tell you that it impinges on the American dream. If you have $50 million and do not know how to invest it for more than 2% growth, you have bigger problems than a wealth tax. If you have a billion dollars and don’t know how to live on $999 million, you don’t need a better tax system, you need a psychiatrist.
- Cheryl Straughter (Owner, Soleil, Boston), Testimony:
Asking ultra-millionaires and billionaires to pay a small percent of their massive wealth is a no-brainer. If you have a huge fortune, and you benefit from all that this country has provided, you ought to be paying your fair share. It’s more than fair that they be asked to pay a small percent of their wealth – and I just can’t understand why the wealthiest and luckiest people in the world would be complaining about it being such a hardship.
- David Gamage (Professor, Indiana University, Maurer School of Law), Testimony:
I am primarily devoting this written testimony to discussing the Ultra-Millionaire Tax Act of 2021 and the broader case for levying a federal tax on extreme wealth holdings. As is well known, both wealth and income inequality have exploded over recent decades, with the gains from economic growth disproportionately going to the richest Americans. Meanwhile, as I will explain, our tax system is broken as applied to the ultra-wealthy, with many harmful consequences. A new federal tax on extreme wealth holdings, like the Ultra-Millionaire Tax Act, should be a central component of reforms for fixing this disgraceful state of affairs.
Secondarily, I will more briefly write in support of both the Real Corporate Profits Tax Act of 2021 and proposals for improving IRS funding and for making it and other tax enforcement funding less dependent on the annual appropriations process. All of these proposals go together as reforms for raising revenues needed for public investment while helping to fix some of the ways in which our tax system is currently broken and easily exploited by tax gaming by ultra-wealthy individuals and families and by large corporations. For the reasons I will explain, I strongly support all of these reform proposals.
April 27, 2021 in Congressional News, Tax, Tax News | Permalink
Tuesday, April 20, 2021
The Senate Finance Committee holds a hearing today on Combatting Inequality: The Tax Code and Racial, Ethnic, and Gender Disparities at 10:00 AM ET (live video here):
- Dorothy Brown (Emory)
Testimony: In my testimony today, I will discuss three ways that tax policies are more likely to provide tax breaks for white Americans than black Americans. The first looks at the tax breaks for marriage. The second looks at tax breaks for sales of homes. The third looks at tax breaks for employer provided retirement accounts. But if there is one thing that I hope you remember from what I will be sharing with you today it is that racial inequality is baked into how our tax laws operate.
- Mihir A. Desai (Harvard)
Testimony: While equity is commonly understood as a guiding principle of tax policy (along with efficiency and administrability), the specific issues raised in this hearing – the role of race, ethnicity, and gender — are important considerations that have not received the attention that they deserve. I applaud your willingness to engage these questions and, in particular, I’m delighted to share this opportunity with Professor Dorothy A. Brown, who has done so much to advance the agenda around race, in particular
April 20, 2021 in Congressional News, Tax, Tax News | Permalink
Thursday, March 4, 2021
Following up on Tuesday's post, Warren Revives Wealth Tax, Citing Pandemic Inequalities: Letter To Senator Elizabeth Warren (Feb. 25, 2021):
Dear Senator Warren,
Your proposed wealth tax reform would impose a federal tax of 2% on taxpayers’ accumulation of net assets in excess of $50 million, and a 3% tax on net assets in excess of $1 billion. The 3% tax would increase to 6% if legislation establishing universal healthcare is in effect.
Article I Section 8 of the Constitution allows Congress to implement your proposed wealth tax reform as an exercise of the congressional taxing power. Some have suggested that a federal wealth tax would be a “direct tax” subject to the “apportionment rule” in Article I Section 2, which provides that “direct Taxes shall be apportioned among the several States … according to their respective Numbers.” A tax on an individual’s net wealth, however, is not a direct tax, and need not be apportioned among the states according to their population.
March 4, 2021 in Congressional News, Tax, Tax News | Permalink
Monday, June 29, 2020
IR 2020-132 (June 29, 2020), National Taxpayer Advocate Erin Collins Delivers Her First Report to Congress; Identifies COVID-19 Challenges, CARES Act, and Taxpayer First Act Implementation As Priority Issues For Taxpayers:
National Taxpayer Advocate Erin M. Collins today released her first report to Congress, identifying taxpayer challenges arising from the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the IRS's implementation of the Taxpayer First Act as priority issues the Taxpayer Advocate Service (TAS) plans to focus on in the coming year. The report also assesses the 2020 filing season, identifies other TAS areas of focus, and includes the IRS's responses to administrative recommendations proposed in the National Taxpayer Advocate's 2019 annual report.
June 29, 2020 in Congressional News, Tax, Tax News | Permalink
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Saturday, June 20, 2020
Congressional Research Service, The Section 199A Deduction: How It Works and Illustrative Examples (R46402 June 10, 2020):
Congress made numerous changes to the federal tax code for individuals and corporate and noncorporate businesses in December 2017, as part of P.L. 115-97 (referred to in this report as the 2017 tax revision but also known as the Tax Cuts and Jobs Act). At the core of the law was a permanent cut in the corporate income tax rate from a top rate of 35% to a flat rate of 21%.
During the congressional debate over the 2017 tax revision, pass-through business owners sought tax relief comparable to any reduction in corporate tax rates. Heeding this request, Congress added a new deduction under Section 199A of the federal tax code. The deduction allows pass-through business owners to deduct up to 20% of their qualified business income (QBI) in determining their personal tax liability. This reduces effective tax rates for pass-through business profits by up to 20%. Like most of the changes in the individual income tax in P.L. 115-97, the new Section 199A deduction is temporary: it is available from 2018 to 2025.
June 20, 2020 in Congressional News, Tax | Permalink
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Saturday, February 15, 2020
The House Ways and Means Committee held a hearing on Tuesday on The Disappearing Corporate Income Tax with these witnesses:
Jason Furman (Harvard), Testimony:
- Corporate tax collections are very low both in historical perspective and compared with other countries. This contributes to the overall low level of revenue.
- The 2017 tax law (Public Law 115-97) is a major reason for this revenue loss, with its total cost likely to be even larger than was estimated when the law originally passed.
- There is no evidence that the 2017 tax law has made a substantial contribution to investment or longer-term economic growth. In fact, business investment growth has
slowed to nearly a halt while economic growth has been propped up by increases in government spending.
- Going forward, a well-designed business tax reform could both increase revenue and encourage more investment and innovation.
Rebecca Kysar (Fordham), Testimony:
- TCJA has failed to live up to its promise of broadening the tax base on the foreign income of multinational corporations, which was the quid pro quo for a lower corporate tax rate.
- Treasury has weakened these already generous features of TCJA in the face of intense lobbying for business interests, which will further erode the U.S. tax base. Troublingly, many of these regulatory giveaways have no statutory basis
February 15, 2020 in Congressional News, Tax, Tax News | Permalink
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Monday, December 23, 2019
CBO, Projected Changes in the Distribution of Household Income, 2016 to 2021 (Dec. 19, 2019):
In this report, the Congressional Budget Office builds on its past analyses of the distribution of household income in the United States by projecting what that distribution would look like in 2021 under current law and comparing those projections with the actual distribution in 2016. In particular, this analysis focuses on how two factors—means-tested transfers and federal taxes—affect the distribution of income. Means-tested transfers are cash payments and in-kind benefits from federal, state, and local governments that are designed to provide assistance to individuals and families with low income and few assets. Such transfers include benefits provided through programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP) but not social insurance benefits, such as Social Security and Medicare. Federal taxes consist of individual income taxes, payroll taxes, corporate income taxes, and excise taxes.
Average Household Income
Average inflation-adjusted household income is projected to grow for all groups. Growth in average income—both before and after means-tested transfers and federal taxes are accounted for— is projected to be fastest for households in the highest quintile (or fifth) of the income distribution.
Cumulative Income Growth
Growth in income before transfers and taxes is generally slower than growth in income after transfers and taxes. That pattern reflects rising means-tested transfer rates and decreasing federal tax rates from 1979 (the first year for which data are available) to 2016.
December 23, 2019 in Congressional News, Gov't Reports, Tax, Tax News | Permalink
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Tuesday, August 6, 2019
The Joint Committee on Taxation has released Disclosure Report For Public Inspection Pursuant to Internal Revenue Code Section 6103(p)(3)(C) For Calendar Year 2018:
Section 6103(p)(3)(C) of the Internal Revenue Code provides that the Secretary of the Treasury shall, within 90 days after the close of each calendar year, furnish to the Joint Committee on Taxation for disclosure to the public a report which provides, with respect to each Federal agency and certain other entities, the number of: (1) requests for disclosure of returns and return information (as such terms are defined in section 6103(b)); (2) instances in which returns and return information were disclosed pursuant to such requests or otherwise; and (3) taxpayers whose returns, or return information with respect to whom, were disclosed pursuant to such requests. In addition, the report must describe the general purposes for which such requests were made.
August 6, 2019 in Congressional News, Gov't Reports, Tax, Tax News | Permalink
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Monday, July 1, 2019
Jason Oh (UCLA), The Distributional and Tax Planning Consequences of the Tax Cuts and Jobs Act (Testimony Before the House Ways & Means Committee (March 27, 2019)):
The TCJA was the most significant overhaul of the tax system in over three decades. It is commendable that this committee is evaluating how this law affects the American public. We are fortunate to have the projections of the Joint Committee on Taxation and various think tanks, but the sheer amount of data can be overwhelming. The goal of my testimony is to crystallize that data into five major takeaways. I pair each takeaway with a figure that captures the point visually.
July 1, 2019 in Congressional News, Scholarship, Tax | Permalink
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Thursday, May 23, 2019
Following up on my previous post, House Holds Hearing Today On The Tax Gap: the Joint Committee on Taxation has released Overview Of The Tax Gap (JCX-19-19) (May 08, 2019):
This document ... provides a standard definition of the tax gap, a description of issues relevant to measurement of the tax gap, and a discussion of taxpayer behavioral responses and the effectiveness of measures to increase compliance. ...
A standard definition of the tax gap is the shortfall between the amount of tax voluntarily and timely paid by taxpayers and the actual tax liability of taxpayers. It measures taxpayers’ failure to accurately report their full tax liabilities on tax returns (i.e., underreporting), pay taxes due from filed returns (i.e., underpayment), or file a required tax return altogether or on time (i.e., non-filing). Estimates of the tax gap provide a picture of the level of overall noncompliance by taxpayers for a particular tax year, and include shortfalls in individual income taxes, corporate income taxes, employment taxes, estate taxes, and excise taxes. The individual behavioral responses to taxation that result in the tax gap raise a set of important policy questions, such as the optimal level of resources to devote to tax administration and the manner in which those resources are best deployed.
The Internal Revenue Service (“IRS”) periodically conducts studies to estimate the size of the tax gap and analyze its components. Table 1 indicates that in the most recent study, the estimated annual gross tax gap, per year on average for tax years 2008-10, was $458 billion and the annual net tax gap, which is the gross tax gap adjusted for late payments and collections due to enforcement activities, was $406 billion. Adjusted for inflation, the gross and net tax gaps are $504 billion and $447 billion in 2016 dollars, respectively. With total average tax liabilities of $2.5 trillion per year between 2008 and 2010, the voluntary compliance rate is 81.7 percent and the net compliance rate is 83.7 percent.
May 23, 2019 in Congressional News, Gov't Reports, Tax | Permalink
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Tuesday, March 26, 2019
Congressional Research Service, Digital Services Taxes (DSTs): Policy and Economic Analysis (R45532) (Feb. 25, 2019):
Several countries, primarily in Europe, and the European Commission have proposed or adopted taxes on revenue earned by multinational corporations (MNCs) in certain “digital economy” sectors from activities linked to the user-based activity of their residents. These proposals have generally been labeled as “digital services taxes” (DSTs). For example, beginning in 2019, Spain is imposing a DST of 3% on online advertising, online marketplaces, and data transfer service (i.e., revenue from sales of user activities) within Spain. Only firms with €750 million in worldwide revenue and €3 million in revenues with users in Spain are to be subject to the tax. In 2020, the UK plans to implement a 3% DST that would apply only to businesses whose revenues exceed £25 million per year and groups that generate global revenues from search engines, social media platforms, and online marketplaces in excess of £500 million annually. The UK labels its DST as an “interim” solution until international tax rules are modified to allow countries to tax the profits of foreign MNCs if they have a substantial enough “digital presence” based on local users. The member states of the European Commission are also actively considering such a rule. These policies are being considered and enacted against a backdrop of ongoing, multilateral negotiations among members and nonmembers of the Organization for Economic Cooperation and Development (OECD).These negotiations, prompted by discussions of the digital economy, could result in significant changes for the international tax system.
March 26, 2019 in Congressional News, Gov't Reports, Tax | Permalink
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Monday, January 28, 2019
Today’s lesson comes from Congress. It is a primer on IRS oversight. It was prompted by an amazing letter I found buried on my desk.
In an October 2015 hearing, House Ways and Means Committee member Diane Black questioned then IRS Commissioner John Koskinen about the lack of IRS responses to 10 GAO oversight recommendations from July 2015.
On October 23, 2015, Koskinen sent her a letter. The letter explained the status of the 10 oversight recommendations. It then also explained the status of 200 additional recommendations from the prior three years, recommendations the IRS had also not responded to. Of the 210 total, 167 had not yet reached their original due dates for responsive actions. The other 43 were late but had received extensions from the oversight bodies who had made the recommendations: the Government Accountability Office (GAO) and the Treasury Inspector General for Tax Administration (TIGTA).
The number 210 is not the amazing part. The amazing part is that the letter explained that during that same three-year period, the IRS has dealt with some 1,240 oversight recommendations just from GAO and TIGTA. That number does not even include the myriad directives and orders from various Congressional oversight committees, nor the yearly Congressional-mandated oversight from the National Taxpayer Advocate. Thinking about the FTE’s needed to address just these 1,240 recommendations makes me dizzy.
I think you will be impressed by the amount of oversight the IRS is subject to; I make no prediction on whether your impression will be good or bad. But I hope today's lesson helps you understand that, as the IRS re-opens with its depleted workforce, it faces more than the tsunami of correspondence from worried taxpayers, and a first return filing season under the wicked complexities of the Tax Cuts and Jobs Act. It must also keep responding to a relentless review of every facet of its operations. Most of the review is done in good faith. Some of it is not, as I explain below the fold. But either way, one can reasonably ask how much is too much. Does the amount of oversight truly make for better tax administration, or not.
January 28, 2019 in Bryan Camp, Congressional News, Miscellaneous, Scholarship, Tax | Permalink
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Thursday, December 20, 2018
A last-minute Christmas gift: Joint Committee on Taxation, General Explanation Of Public Law 115-97 (JCS-1-18) (Dec. 20, 2018) (457 pages):
This document, prepared by the staff of the Joint Committee on Taxation in consultation with the staffs of the House Committee on Ways and Means, the Senate Committee on Finance, and the Treasury Department’s Office of Tax Policy, provides an explanation of Public Law No. 115–97 (also referred to as the ‘‘Act’’ throughout). The explanation of the provisions follows the order of the Act.
For each provision, the document includes a description of prior law, an explanation of the provision, and the effective date. The prior law section describes the law in effect immediately prior to enactment and does not reflect changes to the law made by the provision or by subsequent legislation. For contemporaneous legislative history related to the Act, please see the relevant House Ways and Means Committee report, the reconciliation recommendations submitted by the Senate Budget Committee, and the Conference Report. This document includes citations to some, but not necessarily all, regulations and other administrative guidance issued as of the time of publication of the document. These citations are included strictly as reference tools for readers.
December 20, 2018 in Congressional News, Tax | Permalink
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Sunday, September 30, 2018
Politico, Democrats Planning To Examine Trump’s Tax Returns After the Midterms:
The years-old mystery of what’s in President Donald Trump’s tax returns will likely quickly unravel if Democrats win control of at least one chamber of Congress.
Democrats, especially in the House, are quietly planning on using an obscure law that will enable them to examine the president’s tax filings without his permission.
The nearly 100-year-old statute allows the chairmen of Congress’ tax committees to look at anyone’s returns, and Democrats say they intend to use that power to help answer a long list of questions about Trump’s finances. Many also want to use it to make public confidential information about Trump’s taxes that he’s steadfastly refused to release.
September 30, 2018 in Congressional News, IRS News, Tax | Permalink
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Tuesday, July 24, 2018
Senate Finance Committee Press Release, Wyden Report Details Truth Behind Republican, Trump Claims that Tax Scam Helps Workers, Increases Investment in U.S.:
Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today released a Senate Finance Committee report that explores how Trump’s tax scam rewards multinational corporations, not workers, which will lead to fewer jobs here at home [Trump’s Tax Law and International Tax:
More Complexity, Loopholes and Incentives to Ship Jobs Overseas]. The report debunks false claims made by Republicans and Trump, and lists tactics multinational corporations will use to artificially lower their tax bills and shift profits overseas.
"Donald Trump and Congressional Republicans continue to peddle the false promises outlined in this tax scam report” Wyden said. “Republicans promised $4,000 wage increases and claimed the top priority of their tax law was promoting jobs in the United States. Their new international tax regime instead rewards companies for investing overseas while hardworking Americans watch their wages fall."
July 24, 2018 in Congressional News, Tax | Permalink
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Friday, July 13, 2018
Wall Street Journal, House Panel Passes Tax Break for Gym Memberships, Exercise Classes:
Taxpayers would be able to claim new breaks for gym memberships, exercise classes and other fitness expenses under a bipartisan bill advanced Thursday in the House of Representatives.
The bill would consider those costs as medical expenses for tax purposes, enabling people to use tax-advantaged health-savings accounts and flexible spending accounts to pay for them. The break would be capped at $500 a year for individuals and $1,000 for joint filers. It would reduce federal revenue by $3.5 billion over a decade.
July 13, 2018 in Congressional News, Tax | Permalink
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Monday, July 9, 2018
New York Times, Government Work Done, Tax Policy Writers Decamp to Lobbying Jobs:
Six months after Republicans pushed a $1.5 trillion tax overhaul through Congress, many of the most influential players who worked behind the scenes on the legislation are no longer on Capitol Hill or in the Trump administration.
They are now lobbyists.
The two-way street between lobbying and lawmaking is well worn in Washington. But after President Trump’s campaign pledge to “drain the swamp,” there was some speculation that the so-called special interests might be sidelined. And while the frenetic two-month sprint last year to pass the tax legislation left some lobbyists marginalized, the businesses now scrambling to navigate the changes are increasingly recruiting the people who wrote it.
July 9, 2018 in Congressional News, IRS News, Tax | Permalink
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Thursday, June 28, 2018
The Senate Finance Committee holds a hearing today on the nomination of Pepperdine Law School graduate Charles Rettig's nomination to be the Commissioner of the IRS.
Bloomberg, Trump's IRS Nominee to Face Questions on Management Experience:
President Donald Trump’s nominee to lead the Internal Revenue Service, Charles Rettig, has spent decades helping wealthy and famous people fight the agency’s efforts to collect taxes.
At a Thursday confirmation hearing, the criminal tax lawyer from Beverly Hills, California, will face questions from lawmakers about whether he’s qualified to run the IRS. Democrats will question whether he has the management skills to run an agency struggling to implement the biggest tax overhaul in a generation. ...
Rettig, 61, who has represented the estate of Michael Jackson and the creator of the "Girls Gone Wild" video franchise, probably will win the 51 votes needed for confirmation in the Republican-controlled Senate.
June 28, 2018 in Congressional News, IRS News, Tax | Permalink
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Tuesday, April 24, 2018
The Senate Finance Committee holds a hearing today on Early Impressions of the New Tax Law (livestream at 2:30 pm EST):
We are just four months into our new, modernized tax system and we have already started to see tax reform’s benefits roll in — companies are investing their savings in America’s workforce, utility bills are dropping, and dollars that were locked out overseas are coming home,” Chairman Hatch said. “But given that this was the largest tax rewrite in more than three decades, we still have work to do to support the new law’s implementation. This hearing will allow Finance Committee members to take a look at early impressions of the new tax code.
April 24, 2018 in Congressional News, Tax | Permalink
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Tuesday, March 20, 2018
Congressional Budget Office, The Distribution of Household Income, 2014:
In 2014, household income was unevenly distributed: Households at the top of the income distribution received significantly more income than households at the bottom of the distribution. According to the Congressional Budget Office’s estimates:
- Average income among households in the lowest quintile (or fifth) of the income distribution was about $19,000 (see Summary Figure 1).
- Average income among households in the highest quintile was about $281,000.
March 20, 2018 in Congressional News, Gov't Reports, Tax | Permalink
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Tuesday, December 19, 2017
Following up on my previous post, Why the End of This Year Is the Worst Possible Time to Pass Tax Reform: Sam Wice, The Gimmick Republicans Could Use to Avoid a PAYGO Sequestration, Yale J. on Reg.: Notice & Comment (2017):
Republicans plan to pass a deficit increasing tax-reform proposal, but the Pay-As-You-Go Act (PAYGO) would require a sequestration, an automatic reduction in spending, if tax reform increased the deficit. Republicans could avoid a sequestration by convincing Senate Democrats to support legislation lifting the sequestration. Democrats, however, might not be willing to compromise on an issue that they believe that Republicans caused. Nevertheless, Republicans have a gimmick they could unilaterally use to avoid a sequestration. Specifically, Republicans could use the Treasury Department’s estimate, which claims that the economic growth from tax reform would pay for its costs.
December 19, 2017 in Congressional News, Tax, Tax Policy in the Trump Administration | Permalink
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Monday, December 18, 2017
Saturday, December 16, 2017
Saturday, December 9, 2017
Joint Committee on Taxation, Comparison of the House- and Senate-Passed Versions of the Tax Cuts and Jobs Act (JCX-64-17) (Dec. 7, 2017) (51 pages):
This document ... compares the provisions of the House- and Senate-passed versions of the Tax Cuts and Jobs Act (“TCJA”).
Largely following the organization of the House bill, the document is divided into four sections, individual tax reform, business tax reform, taxation of foreign income and foreign persons, and exempt organizations. Within each section of the document, provisions of the legislation are divided into three categories: (1) provisions for which there are no differences between the House bill and the Senate amendment; (2) provisions for which there are differences between the House bill and the Senate amendment; and (3) provisions that are in only the House bill or the Senate amendment. Except for provisions that are only in the Senate amendment, within each category provisions are generally listed in the order in which they appear in the House bill.
December 9, 2017 in Congressional News, Tax, Tax Policy in the Trump Administration | Permalink
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Thursday, December 7, 2017
Politico, 'Holy Crap': Experts Find Tax Plan Riddled With Glitches:
Republicans’ tax-rewrite plans are riddled with bugs, loopholes and other potential problems that could plague lawmakers long after their legislation is signed into law.
Some of the provisions could be easily gamed, tax lawyers say. Their plans to cut taxes on “pass-through” businesses in particular could open broad avenues for tax avoidance.
Others would have unintended results, like a last-minute decision by the Senate to keep the alternative minimum tax, which was designed to make sure wealthy people and corporations don't escape taxes altogether. For many businesses, that would nullify the value of a hugely popular break for research and development expenses.
December 7, 2017 in Congressional News, Tax, Tax Policy in the Trump Administration | Permalink
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Saturday, December 2, 2017
Senate Budget Committee, Senate Bill (479 pages) (Congress.Gov)
- CNN, Here's What's in the Senate Tax Bill — And How It Differs From the House's Bill
- Huffington Post, Dems Erupt In Anger After ‘Corrupt’ Tax Bill Passes The Senate
- New York Times, Vast Tax Overhaul Clears the Senate, 51-49
- New York Times, How They Voted
- New York Times, Here’s Help Deciphering the G.O.P. Tax Plan
- New York Times, Deficit, Once a G.O.P. Priority, Takes a Back Seat to Cuts
- New York Times, Who Gains From the Tax Plan? Economists Face Off
- New Yorker, The Passage of the Senate Republican Tax Bill Was a Travesty
- Slate, Senate Republicans Pass Their Massive Tax Bill
- Tax Foundation, Key Changes in Senate Tax Reform Bill Heading into the Vote-a-Rama
- Tax Foundation, Important Differences Between the House and Senate Tax Reform Bills Heading into Conference
December 2, 2017 in Congressional News, Tax, Tax Policy in the Trump Administration | Permalink
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Wednesday, November 22, 2017
Shu-Yi Oei & Diane Ring (On Labor), Will Proposed Tax Legislation Tilt the Worker Classification Debate?
Tax reform is in the air. On Thursday, November 9, Senate Republicans released a Description of the Chairman’s Mark (prepared by the Joint Committee on Taxation (JCT)), which contains in substance the Senate version of proposed tax reform legislation. Among other things, that JCT description stated that the bill would clarify the treatment of many workers as independent contractors by providing a safe harbor that, if satisfied, would guarantee such treatment. But in the modification to the Chairman’s Mark released on November 14, that safe harbor provision was stricken from the Senate bill.
In a blog post on TaxProf Blog, we expressed concern about this worker classification clarification provision. In brief, our worry was that even though the legislation “clarifies” the treatment of workers as independent contractors and arguably simplifies some aspects of their tax compliance burdens, it also carries potentially important ramifications for broader fights over worker classification that are occurring in the labor and employment law area.
November 22, 2017 in Congressional News, Gov't Reports, News, Shuyi Oei, Tax | Permalink
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Thursday, November 16, 2017
USA Today, Beer, Booze and a Harvey Weinstein Tax Make It Into the Latest Senate Tax Overhaul Plan:
Sex and booze made it into the congressional battle over taxes in a late-night revision.
The latest changes to a Senate Republican tax plan, released at 10:30 p.m. on Tuesday, include tax cuts for producers of beer, wine and liquor, and a new provision that might be called the Harvey Weinstein tax: An end to corporations' ability to deduct attorney fees and settlement payments in sexual harassment or abuse cases if there is a nondisclosure agreement. ...
The change dealing with lawsuit settlements was proposed by Sen. Bob Menendez, D-N.J., and spokesman Juan Pachon said it was motivated by publicity about settlements over harassment by Hollywood producer Weinstein and former Fox News commentator Bill O'Reilly.
November 16, 2017 in Congressional News, Tax | Permalink
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Saturday, November 11, 2017
Shu-Yi Oei (Boston College) & Diane M. Ring (Boston College), The Senate Tax Bill and the Battles over Worker Classification:
Senate Republicans released their version of tax reform legislation on Thursday, November 9. The legislative language is not available yet, but the Description of the Chairman’s Mark (prepared by the Joint Committee on Taxation) suggests that one of the key provisions in the bill will clarify the treatment of workers as independent contractors by providing a safe harbor that guarantees such treatment. The JCT-prepared description tracks the contents of the so-called “NEW GIG Act” proposed legislations introduced by Congressman Tom Rice (R-S.C.) in the House and Senator John Thune (R-S.D.) in the Senate in October and July 2017, respectively. “NEW GIG” is short for the “New Economy Works to Guarantee Independence and Growth (NEW GIG) Act.” But notably, and as we further discuss below, the legislation is not limited in its application to gig or sharing economy workers.
Assuming the Senate Bill adopts the basic parameters of the NEW GIG proposed legislation — which looks to be the case based on the JCT-prepared description — we have some concerns. In brief, this legislation purports to simply “clarify” the treatment of workers as independent contractors and to make life easier for workers by introducing a new 1099 reporting threshold and a new withholding obligation. But the legislation carries potentially important ramifications for broader fights over worker classification that are raging in the labor and employment law area. Despite possibly alleviating tax-related confusion and reducing the likelihood of under-withholding, we worry that there are quite a few underappreciated non-tax hazards for workers if these provisions go through.
Summary of the Legislation
The legislation (assuming the Senate Bill more or less tracks the NEW GIG Act language) purports to achieve such “clarification” of worker classification status by doing the following:
November 11, 2017 in Congressional News, News, Political News, Shuyi Oei, Tax, Tax Policy in the Trump Administration | Permalink
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Sunday, October 15, 2017
Edward Zelinsky (Cardozo), The House Appropriations Committee and the Johnson Amendment:
The Committee on Appropriations of the US House of Representatives, in a so-called rider to the pending federal budget bill, has proposed significant procedural restrictions on the IRS’s ability to enforce the Johnson Amendment. The Johnson Amendment is the provision of the Internal Revenue Code which prevents all tax-exempt institutions (including churches) from participating in political campaigns. The Committee’s budget rider is the most recent salvo in the ongoing dispute about churches and politics.
October 15, 2017 in Congressional News, Tax | Permalink
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Wednesday, September 20, 2017
Lily Batchelder (NYU), Opportunities and Risks in Individual Tax Reform: Testimony Before the US Senate Committee on Finance:
This testimony before the US Senate Committee on Finance on individual tax reform makes five main points.
First, the current tax reform effort is occurring at a time when low- and middle-income families are facing deep financial challenges. Economic disparities are vast and have been widening for decades. The US also has one of the lowest levels of economic mobility relative to our competitors. Our debt as a share of GDP is projected to grow to unprecedented levels in coming decades, largely because of the retirement of the Baby Boom and increasing life expectancy. This growth in debt will be a drag on economic growth. For all these reasons, tax reform should increase revenues and enhance progressivity. Doing so would boost economic growth and make the tax code fairer at the same time. At a bare minimum, tax reform should maintain the current level of revenues and progressivity—and these both should be measured consistently and without resort to budget gimmicks like a “current policy” baseline.
September 20, 2017 in Congressional News, Scholarship, Tax | Permalink
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Tuesday, September 19, 2017
Congressional Budget Office, An Analysis of Corporate Inversions (Sept. 18, 2017):
U.S. multinational corporations—businesses incorporated and operating in the United States that also maintain operations in other countries—can use a variety of strategies to change how and where their income is taxed. One such strategy is a corporate inversion, which can result in a significant reduction in worldwide tax payments for a company. U.S. companies have engaged in corporate inversions since 1983, and public and government attention to them has varied over the years. Concern grew most recently in 2014 because the group of corporations that announced plans to invert that year included some that were very large: Their combined assets were $319 billion, more than the combined assets of all of the corporations that had inverted over the previous 30 years.
September 19, 2017 in Congressional News, Tax | Permalink
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Monday, August 7, 2017
New York Times op-ed: The Debt-Ceiling Crisis Is Real, by Edward D. Kleinbard (USC):
Sometime in October, the United States is likely to default on its obligation to pay its bills as they come due, having failed to raise the federal debt ceiling. This will cost the Treasury tens of billions of dollars every year for decades to come in higher interest charges and probably trigger a severe recession.
The debt ceiling is politically imposed, and the decision not to raise it, and therefore to choose to default, is also political. It’s something America has avoided in the past. This time, though, will be different. ...
August 7, 2017 in Congressional News, Tax | Permalink
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Following up on previous posts (links below): the Senate has confirmed David Kautter as Assistant Secretary of the Treasury for Tax Policy. From President Trump's nomination announcement:
Mr. Kautter currently serves as Partner-in-Charge of the Washington National Tax practice for RSM, an audit, tax, and consulting services firm. He was also previously the Managing Director of the Kogod Tax Center and Executive-in-Residence at the Kogod School of Business at American University (AU).
Prior to his work at AU, Mr. Kautter spent over 30 years at Ernst and Young, including serving as Director of National Tax for over 13 years. Mr. Kautter also worked on Capitol Hill as Tax Legislative Counsel for former Senator John C. Danforth of Missouri. He is a high honors graduate of the University of Notre Dame and received his J.D. from Georgetown Law Center.
From his webpage at American University's Kogod Tax Center:
August 7, 2017 in Congressional News, IRS News, Tax | Permalink
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Tuesday, August 1, 2017
With the announcement of his resignation/termination, former White House Communications Director Anthony Scaramucci’s tenure in the Trump Administration lasted about 10 days. Those 10 days may prove tremendously interesting from a tax perspective. Like most administrative officials, Mr. Scaramucci requested a Certificate of Divestiture (“Certificate”) from the Office of Government Ethics (“OGE”).
Under the Ethics in Government Act (“Act”) (Ethics in Government Act of 1978, P.L. No. 95-52), certain individuals entering the administration must divest their holdings to avoid ethical dilemmas. Once a Certificate is issued, that individual could qualify under section 1043 for deferral of gains (assuming the procedural requirements are met). Congress enacted section 1043 to further the collective good by eliminating a tax-based barrier for entry into public service. If one qualifies under section 1043, the statute permits deferral of recognition of gain from sales required to comply with the Act if government securities or diversified mutual funds are acquired. (For a full description of the section 1043 rules see also Donald Williamson, A. Blair Staley, and James S. Gale, Tax Planning for Federal Appointee’s Conflict of Interest Requirements, Tax Notes (Mar. 16, 2009).
August 1, 2017 in Congressional News, Political News, Tax | Permalink
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Saturday, July 29, 2017
Washington Post, Democrats’ ‘Better Deal’ for Workers Leaves a Tough Question Unanswered:
Leading Democratic politicians announced their economic agenda for next year's midterm elections on Monday, calling for measures to bring down prices for prescription drugs, control monopolies and help companies pay for training for their workers.
The documents distributed to reporters, however, mentioned taxes only in passing, glossing over what could be a crucial aspect of any Democratic platform in the coming years. Democrats can use tax policy to pay for their other proposals, to equalize incomes directly and to answer frustrated voters' questions about where the party really stands on the economy.
Democrats have frequently called for the rich to pay more in taxes, but some in the party are becoming dissatisfied with the solutions Democrats have put forward so far, which mainly involve untangling kinks and loopholes in the existing system and general, jack-of-all-trades hikes and surcharges.
To lessen inequality and to raise new revenue to fund broad, progressive new programs, senior Democratic policymakers have been talking about novel ideas for taxing the wealth of the richest Americans. Those plans could include a comprehensive tax on capital, a broad category of wealth that includes stocks, bonds, businesses, property and other assets.
“Progressives should be focused on how to fundamentally reform how we tax capital income in this country,” said David Kamin, who served as a special assistant to President Barack Obama on economic issues. ...
July 29, 2017 in Congressional News, Tax | Permalink
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Friday, July 7, 2017
With the looming deadline on both the debt ceiling and the tax reconciliation bill (not to be confused with the ACHA reconciliation instructions), taxes and, hopefully, tax reform are moving to the top of the legislative agenda. The rhetoric of tax reform is heating up. Yesterday Paul Ryan tweeted:
Speaker Ryan is not the only member of GOP leadership discussing tax reform. News last week broke that Steve Bannon wants to raise the top bracket rate to a number that has ”a 4 in front of it”. So, the GOP continues to a least float the idea of substantive tax reform measures.
I don't want to get too carried away about tax reform. Despite my optimism for "reform season," others does not seem to have the same zeal. First there is no "plan" to discuss. Second, the House Appropriations Bill (which I wrote about at Surly) does not seem to be too keen on the chances of real reform measures. For example, the Appropriations Bill addresses estate tax regulations and ACA penalties. If the estate tax and the ACA are on the chopping block, then why worry about the measures in the Appropriations Bill?
July 7, 2017 in Congressional News, Political News, Tax, Tax Analysts, Tax Policy in the Trump Administration, Tax Profs | Permalink
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Monday, May 15, 2017
Andy Grewal (Iowa), The IRS Gets Handcuffed by the Congress, Yale J. on Reg.: Notice & Comment (May 3, 2017):
The House and Senate recently reached agreement on a comprehensive spending bill and expect to pass it soon. Regarding the IRS, the bill freezes the agency’s budget at $11.2 billion and thus does not, as some feared, make substantial cuts to its funding. Nonetheless, the IRS may face hardships, because its funding remains significantly below its 2010 level ($13.6 billion) while its responsibilities have greatly expanded in recent years, especially because of the Affordable Care Act.
May 15, 2017 in Congressional News, IRS News, Tax | Permalink
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