Reforming the charitable deduction. TPC’s Gene Steuerle recommends ways to reform the charitable deduction. His primary suggestion: Congress should take into account cost-effectiveness. “That means putting gains for charitable beneficiaries—not taxpayers or even the charities themselves—as the major objective.
Manchin: EV tax credit is “ludicrous.” Sen. Joe Manchin, who in the past has endorsed an “all-of-the-above” energy policy, may have meant “some of the above.” At a Senate hearing last Thursday he said, “There’s a waiting list for EVs right now with the fuel price at $4. But they still want us to throw [a] $5,000 or $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me whatsoever. When we can’t produce enough product for the people that want it and we’re still going to pay them to take it—it’s absolutely ludicrous in my mind.”
GAO: IRS should expand free online return filing. A new report from the Government Accountability Office (GAO) recommends the IRS develop additional options by the time the current Free File agreement expires next year. GAO found that while 70 percent of filers are eligible for Free File only 3 percent use it. The IRS agreed that it should include customer experience in any future Free File agreement with tax prep firms but opposed additional free filing options. GAO maintains that alternatives would help mitigate risks identified with the Free File program.
On the Hill this week. The Senate Appropriations Subcommittee on Financial Services and General Government holds a hearing tomorrow on the IRS’s 2023 budget. The Senate Finance Committee holds a hearing Wednesday on the political activities of tax-exempt entities.
A de minimus tax exemption for crypto capital gains? Republican senator Cynthia Lummis and Democrat Kirsten Gillibrand will propose to exempt from tax the first $600 in capital gains from the sale of cryptocurrencies. The IRS has long treated crypto as property, so using the currency to make a purchase can trigger a capital gain. Lummis also wants most cryptocurrencies treated as commodities rather than securities.
Kansas Senate passes a “step-down” approach to reducing its grocery tax. The measure would drop the 6.5 percent sales tax on food to 4 percent in 2023, then to 2 percent in 2024. Democratic Gov. Laura Kelly wants to eliminate the tax immediately but lawmakers have balked, worrying that it would reduce revenues by $500 million.
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