Encouraging Retirement Saving, States Still Shop For Tax Cuts

Retirement savings incentives could make their way into an omnibus spending bill. The House Ways & Means Committee’s bipartisan bill is backed by Chairman Richard Neal and top Republican Kevin Brady. It would require most employers to automatically enroll workers in  401(k)-type plans unless employees opt out, boost tax credits for startup firms that offer workplace savings plans, promote a benefit for low-income savers, and allow more catch-up contributions for people in their 60s. It also would expand annuity options and delay required minimum distributions from retirement accounts to age 75.

Pelosi’s red light on a gas tax holiday. House Speaker Nancy Pelosi says she’d back a holiday but with one huge caveat: “If we can have a holiday that guarantees the consumer benefits rather than more profits for the oil companies.” The problem, she added, “It’s very hard to write a bill that requires them to pass it on.”  The holiday has support among some leading Democrats in the House and Senate.

Fund and fix the IRS. A bipartisan group of former top Treasury and IRS officials urged congressional leaders to address the agency’s ongoing backlog processing returns and the large tax gap. The group includes five former IRS commissioners, four former assistant Treasury secretaries for tax policy, two former heads of the Joint Committee on taxation, and several leading tax economists and lawyers. They asked for additional funding in the spending bill Congress must approve next week in avoid a government shutdown.

Is ending the grocery tax on states’ shopping list? TPC’s Richard Auxier reviews current plans to reduce or repeal grocery taxes. But despite the many proposals, the efforts may not succeed. Republicans would rather cut income taxes and Democrats worry they may not find other taxes or palatable spending cuts to make up for the lost revenue. As a result, Richard concludes “grocery tax cuts might not make it to the end of the checkout line in many states this year.”

Connecticut lawmakers push a permanent  EITC. Connecticut’s expanded earned income tax credit  is set to expire July 1 but top Democratic lawmakers want to make the expansion permanent. A Department of Revenue Services study shows that lower-income taxpayers pay a greater percentage of their income on state and local taxes than higher-income households. The General Assembly’s Finance Revenue and Bonding Committee also may propose cuts to the 6.35 percent sales tax and add new exemptions to the personal income tax.

Georgia Republican seeks an income tax cut. The chair of the House Ways & Means Committee released legislation to lower the top income tax rate from 5.75 percent to 5.25 percent. The bill would also set a standard exemption of $12,000 for single or head-of-household filers and $24,000 for married couples filing jointly. The bill would cost $1 billion in 2024.

Captured Russian tanks are not taxable income in Ukraine. The Ukrainian National Agency on Corruption Prevention assures Ukrainians that if they capture a Russian tank or armored personnel carrier, they do not need to declare them as income. Hostile military equipment, weapons, and other armor arrive as scrap so items are impossible to value, the government said.  

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