Friday, October 22News That Matters

Tag: Federal Taxes (US)

Biden’s Plans Raise Questions About What U.S. Can Afford Not to Do

Biden’s Plans Raise Questions About What U.S. Can Afford Not to Do

Business
WASHINGTON — As lawmakers debate how much to spend on President Biden’s sprawling domestic agenda, they are really arguing about a seemingly simple issue: affordability.Can a country already running huge deficits afford the scope of spending that the president envisions? Or, conversely, can it afford to wait to address large social, environmental and economic problems that will accrue costs for years to come?It is a stealth battle over the fiscal future at a time when few lawmakers in either party have prioritized addressing debt and deficits. Each side believes its approach would put the nation’s finances on a more sustainable path by generating the strongest, most durable economic growth possible.The debate has shaped a discussion among lawmakers about what to prioritize as they scale ba...
Democrats Weigh Carbon Tax After Manchin Rejects Key Climate Provision

Democrats Weigh Carbon Tax After Manchin Rejects Key Climate Provision

Technology, World
WASHINGTON — Some House and Senate Democrats, smarting from a move by Senator Joe Manchin III, Democrat of West Virginia, to kill a major element of President Biden’s climate plan, are switching to Plan B: a tax on carbon dioxide pollution.A carbon tax, in which polluting industries would pay a fee for every ton of carbon dioxide they emit, is seen by economists as the most effective way to cut the fossil fuel emissions that are heating the planet.The almost certain demise of the clean electricity program at the heart of Mr. Biden’s agenda — which comes as scientists say forceful policies are needed to avert climate change’s most devastating impacts — has prompted outrage among many Democrats and has led several to say now is the moment for a carbon tax.“I’ve had a carbon pricing bill in m...
Democrats Consider Adding Carbon Tax to Budget Bill

Democrats Consider Adding Carbon Tax to Budget Bill

Technology, World
As she has done for weeks, Ms. Sinema refused to comment on continuing negotiations. When one senator asked what revenue measures she would accept, he said he came away believing she could go along with a tax on carbon emissions and a tax on goods from countries that were not cutting their own greenhouse gases. The latter tax, which is backed by Mr. Wyden, would be designed to ensure that other countries with lax environmental rules would not be able to sell their goods at a lower price to American consumers and reap a competitive advantage. Under the rules of the World Trade Organization, it could be difficult for the United States to impose such an import tax — essentially, a tariff on goods from heavily polluting countries — unless its own industries are also subject to one.Mr. Wyden’s ...
In Push to Tax the Rich, White House Spotlights Billionaires

In Push to Tax the Rich, White House Spotlights Billionaires

Business
WASHINGTON — President Biden is leaning into his push to increase taxes on the rich as he seeks to unify Democrats in the House and Senate behind a $3.5 trillion bill that would expand federal efforts to fight climate change, reduce the cost of child care, expand educational access, reduce poverty and more.“I’m sick and tired of the super-wealthy and giant corporations not paying their fair share in taxes,” Mr. Biden wrote on Twitter on Wednesday, amplifying an argument that Democratic strategists believe will help sell his economic agenda to the public and potentially lift the party’s candidates in midterm elections. “It’s time for it to change.”To buttress that argument, White House economists published on Thursday a new analysis that seeks to show a gap between the tax rate that everyda...
How Accounting Giants Craft Favorable Tax Rules From Inside Government

How Accounting Giants Craft Favorable Tax Rules From Inside Government

Business
This year, Mr. Harter returned to PwC.“I fully complied with Treasury Department conflicts rules by not meeting with PwC representatives” during a two-year “cooling off” period that restricts government officials from meeting with their former employers, Mr. Harter said. Although he was involved in the construction of the offshore tax break and met with corporate lobbyists, Mr. Harter said he did not recall meeting with Ms. Olson or other PwC officials on the topic.Ms. Olson referred questions to PwC.An Inside TrackThe 2017 tax overhaul included a provision that let some people take a 20 percent tax deduction on certain types of business income. But the law — known as Section 199A — largely excluded an undefined category of “brokerage services.” In 2018, lobbyists for several industries, i...

Proposed Tax Changes Focus on the Wealthy

Business
So how do you define who’s wealthy?The latest proposed tax changes from the House Ways and Means Committee essentially say a wealthy individual is someone who earns $400,000 a year or a couple with $450,000 in annual income.“Rich is just the term we use to describe people who have more than us when we don’t think they deserve it,” said Brad Klontz, a financial psychologist in Boulder, Colo. “The definition of rich is entirely subjective,” adding that “$400,000 is just an arbitrary number — it might make you ‘rich’ in Middle America but middle class on the coasts.”Four years ago, when the last changes to the Internal Revenue Code were made, the emphasis was on a lower tax rate for corporations and for super-wealthy individuals, particularly those who owned real estate and could profit from ...
House Bill Raises Chance for Global Pact to Curb Corporate Tax Havens

House Bill Raises Chance for Global Pact to Curb Corporate Tax Havens

Business
Itai Grinberg and Rebecca Kysar, the Treasury officials who have been leading the global negotiations for the United States, argued in an essay last week that with a rate of 21 percent, “jobs and investment can flourish in the United States.”After a virtual meeting with her counterparts of the Group of 7 nations last week, Treasury Secretary Janet L. Yellen said the higher rate would “generate funding for a sustained increase in critical investments in education, research and clean energy.”More details about those plans are expected to be unveiled in early and mid-October. However, it is not clear how and when the United States would enact that part of the agreement, known as Pillar 1, and there are lingering concerns among business groups and Republicans that American companies would bear...
House Democrats’ Plan to Tax the Rich Leaves Vast Fortunes Unscathed

House Democrats’ Plan to Tax the Rich Leaves Vast Fortunes Unscathed

Business
The proposal includes substantial measures to raise taxes on the rich. Taxable income over $450,000 — or $400,000 for unmarried individuals — would be taxed at 39.6 percent, the top rate before President Donald J. Trump’s 2017 tax cut brought it to 37 percent. The top capital gains rate would rise to 25 percent from 20 percent, considerably less than a White House proposal that would have taxed investment gains as income for the richest, at 39.6 percent.Under the committee’s plan, a 3 percent surtax would be applied to incomes over $5 million. The value of estates shielded from estate taxation, which doubled to $24 million for married couples under the Republican tax cuts of 2017, would go back to $12 million at the end of this year, four years earlier than the scheduled expiration.The pro...
Hedge Fund’s Insiders Agree to Pay as Much as $7 Billion to I.R.S.

Hedge Fund’s Insiders Agree to Pay as Much as $7 Billion to I.R.S.

Business
A yearslong dispute between a pioneering hedge fund and the Internal Revenue Service ended Thursday with an enormous bill for taxes and penalties: as much as $7 billion.James Simons, a mathematician whose algorithmic approach has been adopted by many other investment funds, and some of his former colleagues at Renaissance Technologies have settled a decade-long dispute with the government over the tax treatment of some of their investments, the firm said in letter to investors.The settlement, which involves 10 years’ worth of trades made by the hedge fund, could be worth as much as $7 billion, according to a person with knowledge of the agreement. It is one of the largest federal tax disputes in history.The deal ends a standoff that led to a congressional investigation and involved two pol...
The Week in Business: A Big Step for Infrastructure Spending

The Week in Business: A Big Step for Infrastructure Spending

Business
Credit...Giacomo BagnaraWhat’s Up? (Aug. 8-14)Infrastructure Bill Moves to the HouseThe Senate approved a $1 trillion bipartisan infrastructure bill to rebuild roads and bridges and to fund broadband and climate resilience initiatives. The legislation includes several measures to help pay for it, including repurposing pandemic relief funds and tougher scrutiny of cryptocurrency transactions (though the Congressional Budget Office said the plan would still add $256 billion to the deficit over the next decade). Shortly after the passage of the infrastructure bill, the Senate voted along party lines to pass a $3.5 trillion budget blueprint to expand the social safety net, which would be funded primarily by higher taxes for the wealthy and corporations. Both measures face an arduous path in th...