The patch will tide the federal government over until December 3. Senate leaders passed a $480 billion increase to Treasury’s borrowing limit. The increase would give the US enough money to pay its bills until December 3. The House is expected to vote on the measure soon; the measure will then head to President Biden for his signature. While the patch prevents a potential financial crisis with only days to spare ahead of the original Oct. 18 deadline, it sets up a two-tiered fiscal cliff. The debt limit would be reached just as the continuing resolution keeping the federal government open lapses. Until then, the Biden Administration and Democratic leaders expect to continue negotiations on a massive budget reconciliation package that addresses child care, family leave, climate change, and other social spending programs.
Pandora Papers fallout: A legislative crackdown on financial “enablers?” Lawmakers have proposed the “ENABLERS” Act, which would amend the Bank Secrecy Act. Under the bipartisan House legislation drafted by Reps. Tom Malinowski, Maria Elvira Salazar, Steve Cohen, and Joe Wilson, Treasury would establish due diligence rules by the end of 2023 for “middlemen” organizations that facilitate the flow of wealth. Those include art and antique dealers, attorneys conducting financial activities, and others involved in creating limited liability companies. The bill would further require Treasury to establish a task force to implement the rules. It comes in the wake of the release of the Pandora Papers investigation of how world leaders and the rich move their wealth to offshore accounts.
How might tax provisions affect two US companies, one domestic, one global? The Wall Street Journal examines (paywall) how the tax increases proposed in the budget reconciliation bill would affect two different US businesses—one that largely sells its product in the US and another that chiefly operates abroad. Under the legislation, the domestic company would pay more taxes because of the higher statutory rate (26.5 percent, up from 21 percent); the US-based multinational company would also pay more taxes but due largely to the bill’s higher minimum tax on foreign income. The proposed legislation would roll back the rate cuts enacted in the Tax Cuts and Jobs Act without reinstating the many tax breaks the law tightened or eliminated.
Would proposed tax provisions drive the crypto currency industry to seek more help with compliance? TPC’s John Buhl explains that the legislation would require crypto currency brokers to alert the IRS when their customers move their crypto assets to an account that doesn’t have a broker who keeps tabs on trades and purchases. Crypto users may end up pushing the industry to provide even more services that make it easier to comply with tax laws. Contrary to their image in pop culture, investors in crypto currency are, after all, a lot like other investors.
Immigrant parents are less aware of the child tax credit than US-born parents. TPC’s Elaine Maag and Laura Brugger take a closer look at recent data from a survey of parents. Ninety percent of US-born parents knew about the expanded CTC, compared to three quarters of immigrant parents. Anticipating how to use the credit dollars, immigrant parents were more likely to focus on investing in their child’s education, either by using the credit to pay for tutoring or setting it aside for their child’s college fund.
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