An increase in income tax rate means you'll pay a higher percentage of your income to the government. This directly reduces your disposable income, the money you have left after taxes for spending or saving. This can make it harder to afford basic necessities, save for retirement, or invest in your future.
Tax Package Update—Crapo Goes Public: On Feb. 28, Senate Finance Committee Ranking Member Mike Crapo (R-ID) issued a public statement regarding his current stance on the Tax Relief for American Families and Workers Act (H.R. 7024), his first formal comment since the framework for the package was announced by House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR). In the statement, Ranking Member Crapo confirmed that he is willing to advance the bill, but that Senate Republicans will not “rubber-stamp” the bill without an opportunity to amend the bill, emphasizing the expanded child tax credit (CTC). Crapo reiterated concerns regarding the CTC’s “lookback” provision—which would allow families to calculate the amount of the CTC based on their earned income from the prior tax year—as potentially disincentivizing work. Crapo’s statement also expressed some Senate Republicans’ growing concerns that the bill’s provisions would retroactively apply to tax filers who have already filed their 2023 tax returns, resulting in potential compliance and processing issues.
DOE May Seek to Modify Hydrogen Tax Guidance: According to anonymous Department of Energy (DOE) staffers, the DOE is pushing the Treasury Department to relax its Section 45V hydrogen tax credit guidance, a credit enacted as part of the Inflation Reduction Act (IRA, Pub. L. 117-169). Despite being publicly supportive of the proposed regulations, DOE officials are reported to be concerned that the rules’ clean-electricity restrictions, in particular the incrementality requirement, will hurt the agency’s regional hydrogen production hubs program and hinder the development of the domestic hydrogen industry. According to these sources, DOE officials also have concerns about the proposed rules’ hourly matching requirements and originally pushed the Treasury Department to adopt a less stringent approach before the proposed regulations were issued in December 2023. DOE did not confirm whether it is seeking changes to the tax guidance, nor have the White House and Treasury Department commented on the reports. The Treasury Department has received nearly 30,000 comments on the proposed regulations and is not expected to issue final guidance on the hydrogen credit until later this year, potentially after the November election.
IRS Announces Effort to Combat Wealthy Return Non-Filers: On Feb. 29, the Internal Revenue Department (IRS) announced a new effort to identify high-income taxpayers who have failed to file at least one tax return in the last seven years, and thus may not be complying with their tax obligations. Potential evaders are reportedly being flagged using information received from third parties, such as Form W-2, that indicate that a filer had a tax-filing obligation yet neglected to file. The IRS stated that it will begin mailing CP59 Notices to roughly 20,000 to 40,000 delinquent taxpayers per week, starting with the taxpayers having the highest unreported income. At the launch of the initiative, IRS Commissioner Daniel Werfel said the IRS will “ultimately help ensure fairness for everyone who plays by the rules.” The effort is part of a larger effort by the IRS to scrutinize wealthy individuals, large corporations and complex partnerships more closely through Inflation Reduction Act enforcement funding.
Biden’s State of the Union to Discuss Tax Issues: President Biden is slated to deliver his fourth State of the Union address on Thursday, his last such address to Congress before the 2024 presidential election. Biden is expected to focus on the central themes of his reelection campaign, with a focus expected on individual and corporate taxation issues. Biden is likely to reiterate his vow not to raise taxes on individuals and families earning less than $400,000 per year, and he may renew his call on Congress to raise the maximum corporate tax rate from 21% to 28%, among other tax increases. Biden is expected to tout the infrastructural achievements of the CHIPS and Science Act, and may also highlight the Inflation Reduction Act’s energy tax credits.
About Brownstein Hyatt Farber Schreck
Brownstein Hyatt Farber Schreck is a unique law firm. Walk into any of our offices and you’ll immediately recognize a different type of energy. Complacency doesn’t have a place here. Flexibility and inspiration do. Our culture and enthusiasm allow our attorneys, policy consultants and legal staff to stay ahead of our clients’ needs and provide them with the resources they require to meet their business objectives.
We hope you've enjoyed this article. While you're here, we have a small favor to ask...
As we prepare for what promises to be a pivotal year for America, we're asking you to consider becoming a member.
The need for fact-based reporting of issues important to multi generational businesses and protecting a lifetime of savings has never been greater. Now more than ever, multi generational businesses and family businesses are under fire. That's why Family Enterprise USA is passionately working to increase the awareness of issues important to generationally-owned family businesses built on hard work, while continuing to strengthen our presence on Capitol Hill. The issues we fight for or against with Congress in Washington DC include high income tax rates, possible elimination of valuation discounts, increase in capital gains tax, enactment of a wealth tax, and the continued burden of the gift tax, estate tax and generation skipping tax.
Family Enterprise USA promotes generationally owned family business creation, growth, viability, and sustainability by advocating for family businesses and their lifetime of savings with Congress in Washington DC. Since 2007, Family Enterprise USA has represented and celebrated all sizes, professions and industries of family-owned enterprises and multi-generational employers. It is a bi-partisan 501.c3 organization. Family foundations can donate.
#incometax #taxseason #federaltaxpolicy #taxation #EstateTax #Deathtax #wealthtax #taxLegislation #CongressionalCaucus #CapitalGainsTax #incometaxrates #incometaxseason #taxrefund #taxreturn #incometaxreturn #gifttax #Generationskippingtax #InheritanceTax #repealestatetax #FamilyBusiness #promotefamilybusinesses #familyowned #supportlocalbusiness #womeninbusiness #AdvocatingForFamilyBusinesses #Generationallyowned #Multigenerationalbusiness @FamilyEnterpriseUSA @PolicyAndTaxationGroup @DitchTheEstateTax #FamilyEnterpriseUSA #PolicyAndTaxationGroup #DitchTheEstateTax