As Congress gears up to vote on a stopgap spending bill this week, the focus is on maintaining government funding and avoiding a shutdown by the end of September. Speaker Mike Johnson recently unveiled a continuing resolution that would keep the government running at current levels through Dec. 20, setting the stage for legislative action in the House and Senate.
Here are some key points and discussions surrounding the current legislative developments:
- Excluding certain income from tax: While the exclusion of tips from tax may seem politically appealing, TPC’s Steve Rosenthal argues that such proposals can have negative implications on tax equity, efficiency, and revenue. Additionally, it may incentivize workers to manipulate the tax system. Len Burman highlights that income exclusions tend to benefit high-income earners more than low-income workers and suggests a more equitable flat subsidy system.
- Judging the effectiveness of the IRS: TPC’s Janet Holtzblatt emphasizes the importance of the IRS monitoring and evaluating its performance regularly. She proposes a comprehensive approach to measuring performance that takes into account taxpayer satisfaction, compliance burden, tax gap, audit rates, and returns on investment. This approach is seen as an improvement over previous strategies outlined in the IRS’s strategic operating plans.
- Navigating the nation’s fiscal crisis: TPC’s Gene Steuerle discusses the need for a grand bargain that acknowledges tradeoffs to address the fiscal challenges facing the nation. Efforts by organizations like the Peter G. Peterson Foundation and the Center for Collaborative Democracy offer broad reform proposals focusing on Social Security solvency, healthcare, and tax policy.
In conclusion, staying informed on tax-related news and developments is crucial, especially in times of legislative action and policy changes. Subscribe to the Tax Policy Center’s Daily Deduction for the latest updates delivered to your inbox on weekdays. Your engagement and feedback are valuable in shaping informed tax policies. Email Renu Zaretsky to share tips on new research or other news.
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