Missed Tax Day? File by June 14 to avoid larger IRS penalties
24 states are part of recent tax-cutting trend, but what's the broader cost?

House W&M to take up tax bill next week. Here's a preview

US flag flying on US Capitol Dome

We made it through the debt limit's renewal, so of course the focus now is on tax cuts. Or at least the House Republican majority's focus.

That's understandable, at least if you're familiar with how Capitol Hill works. The GOP wants to show that even with its slim House majority, it takes its position as the originator of federal tax laws seriously.

And it wants to lay down some policy and political markers for, respectively, upcoming budget talks and the 2024 elections. To that end, the House Ways and Means Committee will consider next week a package of tax breaks for individuals and businesses.

Areas of agreement…and not: A few issues have broad bipartisan support. Really. Notably there's research and development business tax credits and 1099-K reporting relief for casual online sellers.

There's also a bit of aisle crossing when it comes to tweaking the Tax Cuts and Jobs Act's (TCJA) $10,000 federal itemized deduction limit on state and local taxes (SALT).

More contentious is the Child Tax Credit. The monthly payments during the COVID-19 pandemic were very popular among families and Democrats. Most Republicans are so keen on the tax credit's renewal and expansion.

Then there's the plethora of TCJA's individual tax provisions. While the major 2017 tax reform bill made some major business breaks permanent, the benefits for Jack and Jill Taxpayer are set to expire at the end of 2025.

There obviously are major differences on which ending tax benefits should be retained, but there's general agreement on Capitol Hill that making decisions before the tax laws revert to pre-TCJA law is a good idea.

It's all about debt. Again: However, the debt limit deal between President Joe Biden and House Speaker Kevin McCarthy could create problems here.

During the debt fight, GOP budget hawks were all about reducing the national debt by cutting government spending. The Congressional Budget Office estimates making the TCJA individual tax cuts permanent will cost the U.S. Treasury around $3.5 trillion over the next 10 years.

That's a lot of tax talk that's about to get a lot of Congressional attention. That's why this weekend's Saturday Shout Outs go to several articles looking at what's ahead in the tax legislation arena.

Tax trading time: Taxes are a great petri dish for deal making. Each side stakes its basic policy ground — right now, that's primarily business breaks for the Republicans, family-friendly tax benefits for the Democrats — from which to start negotiations.

Politically, those opposing positions and costs could pay off for both parties. That's because when the margin for success or failure is slim, like now, talks on Capitol Hill tend to follow, at least to some degree, my dear mother's dessert approach: every child (and childishness also is rampant in Washington, D.C.) gets an equal-sized piece.

By agreeing to business breaks, the minority House Democrats could make a better case for some concomitant support for their pet tax provisions from Republicans.

Plus, while businesses provide most campaign money, real human people — not just Supreme Court/Citizens United defined companies as people — actually go to the polls to vote. Members of Congress know that giving those people a reason to want to vote to keep the tax-writing lawmakers in office is always a good idea.

You also might find these items of interest:

 

Advertisements

🌟 Search Amazon Business and Money Books 🌟
The text link above and image links below are affiliate ads. If you click through and then buy a product, I receive a commission.



 

 

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)