Congress has returned with a hefty agenda in hand, but time is of the essence. TaxNotes has reported that with only 13 days of session scheduled, Congress is under pressure to pass a continuing resolution before federal government funding expires on October 1.
- Treasury Recovers Unpaid Taxes:
The Treasury has successfully recovered almost $1.3 billion in unpaid taxes from high earners. Beginning in the fall of 2023 with the Inflation Reduction Act funding, the agency targeted 1,600 taxpayers with over $1 million in income and significant tax debt. Over $1.1 billion has been collected from these taxpayers. In February 2024, the IRS expanded its pursuit to 125,000 high-income, high-wealth taxpayers who had skipped filing taxes since 2017. Within six months, 21,000 of these taxpayers filed and paid a combined $172 million in taxes. - Discussion on the Tax Cuts and Jobs Act of 2017:
A Tax Policy Center (TPC) event held on Thursday highlighted the looming tax debate post-election, focusing on the fate of the Tax Cuts and Jobs Act of 2017. Parts of the Act are set to expire in 2025, potentially increasing taxes for most American households. On September 12, TPC and the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy will gather authors of recent Journal of Economic Perspectives papers to evaluate the TCJA’s impact on individuals, businesses, and investors leading up to the 2025 debate. -
Enhancing Child and Dependent Care Credit:
Senators Tim Kaine and Katie Britt have put forth legislation to enhance the Child and Dependent Care Credit, offering families a larger tax subsidy to cover care expenses. TPC’s Margot Crandall-Hollick has analyzed the proposal, noting that while it increases the credit’s value, other options could better support low-income working parents who receive minimal benefits from existing child care tax breaks. -
State Revenue Decrease:
A recent report from TPC’s State and Local Finance Initiative reveals that the majority of states experienced revenue declines in June. Between July 2023 and June 2024, the median state observed a 2.1 percent decrease in total state tax collections adjusted for inflation. Personal income taxes fell by 2.7 percent, corporate income taxes by 5.9 percent, and sales taxes by 1.6 percent. TPC’s Lucy Dadayan emphasizes the uncertainty in long-term state tax revenue projections, citing factors such as the upcoming presidential election and potential changes in federal tax policies.
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