A Promise And A Flat Tax (Or Two)
Werfel: Under his watch, the IRS would not increase audits on most tax filers. In a nomination hearing before the Senate Finance Committee yesterday, Daniel Werfel, President Biden’s pick for IRS Commissioner, committed to not increasing tax audits on businesses and households making less than $400,000 per year with the additional funds made available under the Inflation Reduction Act.
So far, more taxpayers are filing early this year compared to last. The IRS shared that it’s received nearly 19 million filed returns through Feb. 3, about 2.3 million more returns than it received at this time last year. The agency has issued about 8 million refunds. The average refund check per filer is so far $1,963, compared to an average $2,200 refund at this time in 2022.
Tune in at Noon for TPC’s Prescription with the Tax Foundation’s Erica York on a national sales tax. She’ll discuss the return of the Fair Tax Act. Most experts don’t think the plan is workable. Could another kind of federal consumption tax make sense in the future? Tune in today at 12:00 pm Eastern.
Kansas lawmakers debate a proposal for a state flat tax. The proposal for a 5 percent income tax rate for corporations and individuals, backed by the Kansas Chamber of Commerce, would lower revenues by an estimated $1.5 billion annually. The Chamber and other proponents say the state’s population is declining, and a flat tax would make Kansas more attractive to prospective residents. A Kansas National Education Association spokesman responded, “Kansas tried similar tax strategies in the recent past that left the fiscal health of the state in a state of chaos and uncertainty.” Kansas Democrats instead support the immediate elimination of the sales tax on food, feminine hygiene products, and back-to-school supplies.
Canada says foreigners can’t buy real estate for two years, and taxes current foreign property owners. In an effort to control skyrocketing housing prices in Toronto and Vancouver, Canada has barred foreigners from buying real estate for two years. Foreigners can still buy recreational properties that are not located in major metropolitan areas. Canada also implemented a new annual 1 percent tax on the value of properties that are occupied less than 180 days per year. The tax affects not just speculators but Americans who own vacation homes along Lake Erie.
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