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CDC eases Covid guidance as US has more tools to fight the virus and keep people out of the hospital

CDC eases Covid guidance as US has more tools to fight the virus and keep people out of the hospital

A sign outside of a hospital advertises COVID-19 testing on November 19, 2021 in New York City. On Friday vaccine advisers to the US Centers for Disease Control (CDC) and Prevention voted unanimously in recommending a booster shot of the COVID-19 vaccines for all adults in the United States six months after they finish their first two doses.

Spencer Platt | Getty Images

The Centers for Disease Control and Prevention eased its Covid-19 guidance on Thursday, saying the virus now poses a much lower risk of severe illness, hospitalization and death compared to earlier in the pandemic.

The CDC is no longer recommending testing to screen people with possible asymptomatic infections in most settings, such as schools. However, screening is still recommended in certain high risk settings such as nursing homes and prisons.

And people who are not up to date on their vaccines no longer need to quarantine if they have been exposed to Covid-19, according to the new CDC guidance. Instead, public health officials now recommend that these individuals wear a mask for 10 days and get tested on day five.

Greta Massetti, a CDC epidemiologist, said the US has the vaccines and treatments needed to fight the virus. As a consequence, the virus now poses a much lower threat to public health, according to the CDC. But it remains crucial for everyone to remain up to date on their vaccines, according to the public health agency.

“This guidance acknowledges that the pandemic is not over, but also helps us move to a point where COVID-19 no longer severely disrupts our daily lives,” Massetti said in a statement.

People with healthy immune systems, regardless of vaccination status, should isolate for five days after testing positive for the virus, but you can end isolation at day six if you have not had symptoms or if you have not had a fever for 24 hours and other symptoms have improved, according to the guidelines.

After leaving isolation, you should wear a high-quality mask through day 10 after your positive test. If you have had two negative rapid antigen tests you can stop wearing your mask earlier, according to the guidelines. But you should avoid people who are more likely to get sick from Covid, such as the elderly and people with weak immune systems, until at least day 11.

People with weakened immune systems, those who have been hospitalized with Covid, or those who have had shortness of breath due to the virus should isolate from others for 10 days. But people with weakened immune systems and those who were hospitalized should also consult a physician before ending isolation.

If you end isolation but your Covid symptoms worsen, you should return to isolation and follow the guidelines from scratch again, according to the CDC.

The US is currently reporting more than 107,000 new cases a day on average, according to the CDC. That’s likely to be a significant undercount because many people are now testing at home and results are not picked up in official data.

About 6,000 people with Covid are admitted to the hospital a day on average, according to the CDC data. Nearly 400 people are still dying a day on average from the virus.

CNBC Health & Science

Read CNBC’s latest global health coverage:

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Attorney General Garland to make statement after Trump raid by FBI

Attorney General Garland to make statement after Trump raid by FBI

Attorney General Merrick Garland is scheduled to make a statement Thursday afternoon, three days after FBI agents raided the Florida residence of former President Donald Trump.

The Justice Department, which Garland heads, has faced pressure since that raid to provide a public explanation for the search of the Trump home at his Mar-a-Lago club.

Trump, who is a Republican, and his allies have said the search was politically motivated and pointed the finger at the administration of President Joe Biden, a Democratic, in condemning the probe.

FBI seized about a dozen boxes from the residence Monday, according to Trump’s lawyer Christina Bobb.

She had said agents left a copy of the search warrant, which indicated they are investigating possible violations of laws related to the Presidential Records Act and the handling of classified material.

A senior White House official told NBC News on Thursday that they were unaware of what Garland would say.

US Attorney General Merrick Garland speaks to the press at the Justice Department after all three defendants were found guilty of federal hate crimes for the murder of a young Black man, Ahmaud Arbrey in Washington, DC, US, February 22, 2022.

Nicholas Kamm | Reuters

“We have had no notice that he was giving remarks and no briefing on the content of them,” the official said.

The Justice Department, and Garland, have a longstanding policy about not commenting on criminal investigations before charges are filed.

This is breaking news. Please check back for updates.

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Detroit real estate developers rebuild city amid budget shortfalls

Detroit real estate developers rebuild city amid budget shortfalls

A new wave of development is ripping through downtown Detroit.

“Walking around Detroit in 2008 or 2009 is not the same as walking around in 2022,” said Ramy Habib, a local entrepreneur. “It is absolutely magnificent what happened throughout those 15 years.”

Between 2010 and 2019, just 708 new housing structures went up in the city of Detroit, according to the Southeast Michigan Council of Governments.

Much of the new construction traces back to the philanthropic wings of large local businesses. For example, Ford Motor is nearing completion of a 30-acre mixed-used development at Michigan Central Station. The station sat abandoned for years as the city fell into bankruptcy.

Detroit’s decline into insolvency formed amid 20th century globalization in the auto industry, according to economists. The city’s population fell from 1.8 million to 639,000 in the most recent but controversial count by the US Census. “With the population leaving, with the infrastructure staying in place, it meant strains on the city. Cumulatively, they started to mount over time,” said Raymond Owens III, a former senior economist at the Federal Reserve Bank of Richmond.

The 2007-08 Great Recession left another round of scars on the city as scores of homes fell into foreclosure. The US Treasury Department has since funded the removal of 15,000 blighted structures in the city. “A lot of Black people are leaving the city. So sometimes that identity can change and shift in certain communities,” said Alphonso Carlton Jr, a lifelong Detroit resident.

Local leaders have used tax and spending policies to advance economic development downtown. In July 2022, the Detroit City Council finalized a tax abatement for the real estate developer Bedrock to finance the $1.4 billion Hudson’s site project. The abatement could be worth up to $60 million over its 10-year span. Bedrock is in a family of companies controlled by billionaire investor Dan Gilbert, who moved several of his businesses from him downtown in 2010.

Bedrock told CNBC that decision was consistent with the council’s handling of other major developments, due to high local tax rates. One local analysis suggests that in 2020, Detroit’s effective property tax rate on homes was more than double the national average. Detroit’s new tax, spending and placemaking policies have drawn the interests of bond investors in recent years, providing another source of revenue for the local government.

Watch the video above to learn more about Detroit’s escape from bankruptcy.

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China’s trade curbs on Taiwan after Pelosi visit are drop in the ocean

China's trade curbs on Taiwan after Pelosi visit are drop in the ocean

Beijing’s new trade blocks against Taiwan affect about 0.04% of their two-way trade, making them more political than economic.

Beijing took action against Taiwan following US House Speaker Nancy Pelosi’s visit to the island earlier this month despite warnings from Beijing. That included suspensions of imports of Taiwanese citrus, frozen fish, sweets and biscuits and exports of natural sands to Taiwan.

Taiwan is a self-ruled democracy, but Beijing considers the island part of its territory and a breakaway province. China says Taiwan has no right to conduct foreign relations and warned for weeks against Pelosi’s visit.

What trade numbers show

US House Speaker Nancy Pelosi with Taiwan’s President Tsai Ing-wen, after arriving at the president’s office on August 3, 2022, in Taipei, Taiwan. Pelosi’s visit infuriated China, which regards the self-ruled island as its own and responded with test launches of ballistic missiles over Taipei for the first time, as well as ditching some lines of dialogue with Washington.

Handout | Getty ImagesNews | Getty Images

When it comes to Taiwan’s imports from mainland China, more than half of the $82 billion traded in 2021 were electrical machinery, electronic and technological parts as well as nuclear reactors and boilers.

As for Taiwan’s exports to China, 65% of them were also similar goods in electrical machinery, electronic and technological parts.

Drop in the ocean

On the other hand, the volume of trade in areas that Beijing has targeted is relatively small.

Exports of natural sand to Taiwan — which Beijing has targeted — were a drop in the ocean against the above figures. They amounted to about $3.5 million last year, data from the Taiwanese trade bureau showed.

They were also a small trade compared with natural sand exports from Australia and Vietnam, the biggest suppliers of natural sand to Taiwan last year. Together, they supplied about $64 million of the raw material used in construction and other industries, making up 70% of Taiwan’s purchases, according to its trade bureau.

Similarly, the targeted trade of citrus was valued at a relatively small $10 million last year, though mainland China was also Taiwan’s biggest citrus buyer, Taiwan’s trade data showed.

The agricultural products now in the headlines are only a fraction of Taiwan’s export basket. And so the headline impact on Taiwan won’t really be noticeable.

Nick Brown

Economist Intelligence Unit

Other targets such as Taiwan’s exports of bread, pastry, cakes and biscuits to mainland China were worth more than $50 million in total last year.

Beijing’s specific suspension of two kinds of frozen fishes, horse mackerel and largehead hairtail, were valued at over $3 million in 2021, according to Taiwan’s trade bureau.

“China’s economic retaliation against Taiwan is a long-standing strategy in its diplomatic playbook. That said, its decision to target relatively low-value trade items reflects the limits of its economic pressure toolbox,” said global trade lead analyst at the Economist Intelligence Unit , Nick Marro.

“It’s already had restrictions on Chinese visitors to Taiwan in place for a few years, which carry more economic significance; the agricultural products now in the headlines are only a fraction of Taiwan’s export basket. And so the headline impact on Taiwan won’t really be noticeable.”

Precedents

Beijing’s trade suspensions against Taiwan are not a new phenomenon.

In previous years, tensions between the two have led to bans on mainland travelers to Taiwan.

Last year, China suspended imports of Taiwanese pineapples, citing quarantine measures over “harmful creatures” that came with the fruit. China was Taiwan’s biggest pineapple buyer up to that point.

Investment bank Natixis said that the recent Chinese trade restrictions focused on “highly replaceable food products” but not the information and communications technology sector in which the two trading partners have the most trade.

The bank also said mainland China will continue to import from Taiwan as long as it needs the goods, similar to what it has done in other trade conflicts such as the one it has with Australia and the United States.

In the China-Australia trade dispute that started in 2020, China restricted the purchase of some goods such as barley and coal but continued to buy iron ore from Australia, a key ingredient for China’s steel production and the bedrock of the countries’ trade.

There may also be other fallouts from the Pelosi visit that could hurt wider regional trade. For example, heightened military drills in the Taiwan Strait may delay shipments, analysts say.

“The shutting down of these transport routes — even temporarily — has consequences not only for Taiwan, but also trade flows tied to Japan and South Korea,” Marro said.

“It’s not just a story for Taiwan and China, but also for their neighbors, as well.”

Analysis by logistics platform Container xChange said any rerouting of shipping lines to avoid military exercises may be problematic for the trading world as it enters peak shipping season.

Container xChange Chief Executive Christian Roeloffs said, however, that supply chains have become far more resilient over the course of the pandemic.

Customer feedback shows any rerouting of vessels away from the Taiwan Strait will add a few days to ship voyages, though Roeloffs does not anticipate a massive hit to logistics costs.

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Inflation Reduction Act extends $7,500 tax credit for electric cars

Inflation Reduction Act extends $7,500 tax credit for electric cars

David Madison | Photodisc | Getty Images

A federal tax break that’s available to car buyers for going electric may work differently starting next year.

Under the Inflation Reduction Act — which received Senate approval on Sunday and is expected to clear the House this week — a tax credit worth up to $7,500 for buyers of new all-electric cars and hybrid plug-ins would be extended through 2032. The bill would also create a separate tax credit worth a maximum $4,000 for used versions of these vehicles.

Yet the measure would also usher in new limits to both who can qualify for the credit and which vehicles are eligible for it.

The tax credit has ‘price and income restrictions’

“First, in order to qualify, there are price and income restrictions,” said Seth Goldstein, a senior equity analyst at Morningstar.

For new vehicles, the manufacturer’s suggested retail price for sedans would need to be below $55,000 to be eligible for the tax credit. For SUVs, trucks and vans, that price cap would be $80,000.

Additionally, the credit would be unavailable to single tax filers with modified adjusted gross income above $150,000. For married couples filing jointly, that income limit would be $300,000, and for individuals who file as head of household, $225,000.

“What we’ve seen is that many [electric vehicles] are luxury cars,” Goldstein said. “And buyers of those are in higher income brackets, so that limits right away the ability to qualify for the tax credit.”

For used electric vehicles to qualify, the car would need to be at least two model years old, among other restrictions. The credit would be worth either $4,000 or 30% of the car’s price — whichever is less — and the price cap would be $25,000.

Those purchases also would come with income caps: Individual tax filers with income above $75,000 would be ineligible for the credit. That cap would be $150,000 for joint filers and $112,500 for heads of household.

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Another determining factor for whether a vehicle would qualify for a full or partial credit (or neither) include a requirement that the final assembly of the car would need to be in North America. Additional qualifiers include limitations on where key materials for batteries can come from and a mandate that a specified portion of battery components must be manufactured or assembled in North America.

“It’s designed to encourage domestic production in North America,” said Scott Cockerham, an attorney and partner at Orrick.

Many electric vehicles may not qualify for the credit

However, it could be difficult for cars to qualify, he said, depending on where they source their materials and where they complete the manufacturing process. The Alliance for Automotive Innovation has warned that many electric vehicles will be ineligible for the credit right off the bat.

Additionally, another change in the legislation would allow a car buyer who qualifies for the tax credit to transfer it to the dealership, which could then lower the price of the car.

Meanwhile, another modification included in the bill is good news for some electric vehicle manufacturers.

Basically, the existing $7,500 credit was authorized in 2008 and 2009 legislation with the intention of spurring adoption of electric cars. Part of that included a phase-out of the tax credit once a manufacturer reached 200,000 of the vehicles sold.

Tesla hit that threshold in 2018, which means their electric cars currently do not qualify for the tax credit. General Motors is in the same position. Toyota (including its Lexus brand) also has now crossed that threshold, and its electric cars are scheduled to be ineligible for the tax credit after a phaseout of it ends in September 2023.

The congressional measure would eliminate that 200,000 sales cap, making their electric cars again eligible for the credit — at least based on that sales-threshold removal.

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What carried interest is, and how it benefits high-income taxpayers

What carried interest is, and how it benefits high-income taxpayers

Sen. Kyrsten Sinema, D-Ariz., and Sen. Joe Manchin, DW.V., on Capitol Hill on Sept. 30, 2021.

Jabin Botsford | Washington Post | Getty Images

Senate Democrats passed a historic package of climate, healthcare and tax provisions on Sunday.

But one proposed tweak to the tax code — a modification of so-called carried interest rules — didn’t survive due to objections from Sen. Kyrsten Sinema, D-Ariz., whose support was essential to pass the Inflation Reduction Act in an evenly divided Senate. The bill now heads to the House, which is expected to pass it this week.

Many Democrats and opponents refer to the lower tax rate on carried interest as a loophole that allows wealthy private equity, hedge fund and other investment managers to pay a lower tax rate than some of their employees and other American workers.

“It’s a real rich benefit for the wealthiest of Americans,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “Why should a private-equity manager be able to structure his or her compensation for her with low-taxed gains? That seems wrong.”

Here’s what carried interest is, and why many Democrats want to change how it’s taxed.

Carried interest compensates investment executives

Carried interest is a form of compensation paid to investment executives like private equity, hedge fund and venture capital managers.

The managers receive a share of the fund’s profits — typically 20% of the total — which is divided among them proportionally. The profit is called carried interest, and is also known as “carry” or “profits interest.”

Here’s where the tax controversy lies: That money is considered a return on investment. As such, managers pay a top 20% federal tax rate on those profits, rather than regular federal tax rates of up to 37% that apply to compensation paid as a wage or salary.

That preferential 20% tax rate is the same as “long-term capital gains,” which applies to investments like stocks, bonds, mutual funds and real estate held for more than a year.

Bulk of fund managers’ compensation is carried interest

Carried interest accounts for the “vast majority” of compensation paid to managing partners of private equity funds, according to Jonathan Goldstein, who leads the Americas private equity practice at Heidrick & Struggles, an executive search firm.

For example, carried interest accounts for at least 84% of managing partners’ total compensation, on average, according to a Heidrick & Struggles 2021 survey. The share varies, depending on a firm’s assets under management, though skews well over 90% among partners at larger firms.

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In dollar terms, managing partners’ carried interest ranged from $10 million to $102 million, on average, according to the survey, again depending on overall assets under management.

Additionally, while capital gains for wealthy investors are generally subject to an additional 3.8% Medicare surtax, not all carried interest is subject to this “net investment income tax,” according to tax experts. When it is factored in, managers that are subject to the tax would owe a 23.8% total top tax rate at the federal level, when added to the 20% top rate for capital gains.

Some say it’s a ‘stain’; others, a ‘successful policy’

Wealthy investors, including Warren Buffett and Bill Ackman, have lambasted the tax treatment of carried interest.

“The carried interest loophole is a stain on the tax code,” Ackman, the chief executive of Pershing Square, wrote July 28 on Twitter.

However, other tax experts and proponents of the current tax structure think a lower rate on carried interest is appropriate, benefiting investors and the economy. Raising taxes on fund profits would be a disincentive for managers to take risk and would reduce investment capital, they said.

“Carried interest is appropriately taxed as a capital gain and a successful policy that incentivizes investment in the US economy,” according to Noah Theran, the executive vice president and managing director of the Managed Funds Association, a trade group.

Higher tax rates could also have “spillover effects” by reducing the rate of return for investors like pension funds and other institutions, said Jennifer Acuna, a partner at KPMG and former tax counsel for the Senate Finance Committee.

“The policies have been going back and forth for many years, on what is the right policy to tax carried interest,” Acuna said. “I don’t think it’s a slam dunk.”

Proposal would have curtailed carried interest

A deal brokered by Senate Majority Leader Chuck Schumer, D-NY, and Sen. Joe Manchin, DW. Va., initially proposed curtailing the tax break for carried interest. However, the proposal was removed from the final legislation that passed the Senate.

Most significantly, the proposal would have required fund managers to hold portfolio assets for five years — an increase from three years — in order to receive the preferential 20% tax rate.

Managers with a holding period of less than five years would incur “short-term” capital gains tax rates on carried interest — a 37% top rate, the same that applies to wage and salary income for the highest-income taxpayers.

Another proposed tweak would have effectively lengthened that holding period beyond five years, according to Rosenthal.

That’s because the initial proposal would have started counting the five-year clock only after a private-equity fund made “substantially all” of its investments — a term that isn’t specifically defined but which tax experts would generally consider as 70% to 80 % of a fund’s investment capital being committed, Rosenthal said.

In practice, that would likely have extended the effective holding period to roughly seven to nine years, a policy that “had some bite,” he added.

Democrats estimated that the proposed changes to the carried interest rules would have raised $14 billion over 10 years.

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Inflation Reduction Act limits pass-through tax break for 2 more years

Inflation Reduction Act limits pass-through tax break for 2 more years

Senate Majority Leader Chuck Schumer, DN.Y., discusses the Inflation Reduction Act on Aug. 7, 2022 in Washington, DC

Kent Nishimura | Los Angeles Times | Getty Images

Senate Democrats curtailed a tax break for certain pass-through businesses as part of the Inflation Reduction Act passed Sunday.

A pass-through or flow-through business is one that reports its income on the tax returns of its owners. That income is taxed at their individual income tax rates. Examples of pass-throughs include sole proprietorships, some limited liability companies, partnerships and S-corporations.

Democrats’ legislation — a package of health-care, tax and historic climate-related measures — limits the ability of pass-throughs to use big paper losses to write off costs like salaries and interest, according to tax experts.

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That limit — called the Limitation on Excess Business Losses — is currently already in place. It was scheduled to end starting in 2027, but the new bill would extend the restriction for an additional two years. That extension wasn’t in Senate Democrats’ initial version of the legislation, but it was added during the subsequent negotiation and amendment process.

The Inflation Reduction Act passed along party lines and now heads to the House.

Wealthy real estate owners likely impacted most

Republicans originally enacted the pass-through limitation in the 2017 tax law known as the Tax Cuts and Jobs Act.

Specifically, the law disallowed pass-through owners from using business losses exceeding $250,000 to offset non-business income. That dollar threshold is for single taxpayers; the law set a $500,000 cap for a married couple filing a joint tax return.

Those caps are higher in 2022 due to an inflation adjustment: $270,000 and $540,000, respectively.

“The business losses can only offset other business income, not salaries and interest and investment gains,” Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, said of the measure.

The provisions hurt “rich guys” who were using business losses to take tax write-offs against bonuses, salaries and investment income, for example, said Rosenthal.

The limitations can theoretically apply to any pass-through business that runs up a big operating loss each year. But real estate businesses — which can use rules around depreciation to consistently rack up big losses on paper — are likely among the most affected categories, according to Jeffrey Levine, a certified financial planner and certified public accountant based in St. Louis.

It’s a really big deal for uber-wealthy people with a ton of real estate.

Jeffrey Levine

chief planning officer at Buckingham Wealth Partners

“It’s a really big deal for uber-wealthy people with a ton of real estate, and then the occasional business that loses a ton of money every year,” said Levine, who is also chief planning officer at Buckingham Wealth Partners.

The limitation for pass-throughs was initially scheduled to expire after 2025, along with the other provisions of the Republican tax law that affected individual taxpayers.

However, Democrats extended the limit for an additional year in the American Rescue Plan, which President Biden signed into law in 2021. The Joint Committee on Taxation estimated that that one-year extension would raise about $31 billion.

The Inflation Reduction Act’s additional extension would presumably raise a roughly similar amount of money each year, Rosenthal said.

However, the business losses don’t necessarily disappear forever. Owners may be able to defer the tax benefits to future years, if Congress doesn’t extend the limitation again.

“The losses almost always get claimed later,” Rosenthal said.

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Biden approves Finland and Sweden NATO membership bids

Biden approves Finland and Sweden NATO membership bids

US President Joe Biden, alongside Vice President Kamala Harris, Swedish ambassador to the US Karin Olofsdotter and Finnish ambassador to the US Mikko Hautala, signs documents endorsing Finland’s and Sweden’s accession to NATO, in the East Room of the White House, in Washington, August 9, 2022.

Evelyn Hockstein | Reuters

WASHINGTON — President Joe Biden signed ratification documents Tuesday bringing Finland and Sweden one step closer to joining the NATO alliance.

“[Russian President Vladimir] Putin thought he could break us apart,” Biden said from the East Room of the White House. “Our alliance is closer than ever, it is more united than ever, and after Finland and Sweden join we will be stronger than ever.”

Last week, the Senate voted 95 to 1 to ratify the entrance of Finland and Sweden into the world’s most powerful military alliance.

In May, both nations began the formal process of applying to NATO amid the backdrop of Russia’s war in Ukraine. Moscow, long wary of NATO expansion, has opposed the two nations’ plans to join the alliance.

Both Finland and Sweden already meet many of the requirements to be NATO members. Some of the requirements include having a functioning democratic political system, a willingness to provide economic transparency and the ability to make military contributions to NATO missions.

“They will meet every NATO requirement, we are confident of that,” Biden said before signing the documents.

Earlier this year, Biden welcomed leaders from both countries to the White House and pledged to work with the Senate — which has to sign off on US approval of NATO bids — and the other 29 members of the alliance to swiftly bring Sweden and Finland into the group.

At the time Biden, flanked by Finnish President Sauli Niinisto and Swedish Prime Minister Magdalena Andersson, said the two countries would “make NATO stronger.” He called their moves to join the pact a “victory for democracy.”

US President Joe Biden, flanked by Swedens Prime Minister Magdalena Andersson and Finlands President Sauli Niinistö, speaks in the Rose Garden following a meeting at the White House in Washington, DC, on May 19, 2022.

Mandel Ngan | AFP | Getty Images

After Biden’s signature, the governments of the Czech Republic, Greece, Hungary, Portugal, Slovakia, Spain and Turkey will still need to sign the instruments of ratification.

“I urge the remaining allies to complete the ratification process as quickly as possible,” Biden said, a development that must occur by the end of September. “The United States is committed to the transatlantic alliance. We are going to write the future we want to see.”

In June, NATO Secretary General Jens Stoltenberg said the leaders of the alliance had reached a deal to admit Finland and Sweden after resolving the concerns of holdout Turkey.

Previously, Turkish President Recep Tayyip Erdogan said he would not approve the applications, citing their support for Kurdish organizations that Turkey considers security threats.

During a NATO summit in Madrid, the foreign ministers of Finland, Sweden and Turkey signed a memorandum to confirm that Turkey will back the new NATO bids.

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With 87,000 new agents, here’s who the IRS may target for audits

With 87,000 new agents, here's who the IRS may target for audits

Jeffrey Coolidge | Photodisc | Getty Images

As the Democrats’ spending plan moves closer to a House vote, one of the more controversial provisions — nearly $80 billion in IRS funding, with $45.6 billion for “enforcement” — has raised questions about who the agency may target for audits.

IRS Commissioner Charles Rettig said these resources are “absolutely not about increasing audit scrutiny on small businesses or middle-income Americans,” in a recent letter to the Senate.

However, with the investment projected to bring in $203.7 billion in revenue from 2022 to 2031, according to the Congressional Budget Office, opponents say IRS enforcement may affect everyday Americans.

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“Our biggest worry in this is that the burden for these audits will land on Walmart shoppers,” Rep. Kevin Brady, R-Texas, said Tuesday on CNBC’s “Squawk Box.”

Overall, IRS audits plunged by 44% between fiscal years 2015 and 2019, according to a 2021 Treasury Inspector General for Tax Administration report.

While audits dropped by 75% for Americans making $1 million or more, the percentage fell by 33% for low-to-moderate income filers claiming the earned income tax credit, known as EITC, the report found.

Our biggest concern in this is that the burden for these audits will land on Walmart shoppers.

Rep. Kevin Brady, R-Texas

Ken Corbin, chief taxpayer experience officer for the IRS, said returns claiming the EITC have “historically had high rates of improper payments and therefore require greater enforcement,” during a May House Oversight Subcommittee hearing.

Since many lower-income Americans are wage earners, these audits are generally less complex and many may be automated.

How the IRS picks which tax returns to audit

Currently, the IRS uses software to rank each tax return with a numeric score, with higher scores more likely to trigger an audit. The system may flag a return when deductions or credits compared to income fall outside of acceptable ranges.

For example, let’s say you make $150,000 and claim a $50,000 charitable deduction. You’re more likely to get audited because it’s “disproportionate” to what the system expects, explained Lawrence Levy, president and CEO of tax resolution firm Levy and Associates.

Other red flags for an IRS audit may include unreported income, refundable tax credits such as the EITC, home office or auto deductions, and rounded numbers on your return, experts say.

How IRS audits may change with more funding

While the legislation still must be approved by the House and signed into law, it will take time to phase in the funding, hire and train new workers.

The IRS aims to hire roughly 87,000 new agents, according to the Treasury Department.

New auditors may have a six-month training program and receive cases worth a few hundred thousand dollars rather than tens of millions, Levy said.

“You’re not going to give a new General Motors trainee, for example,” he said. “It just isn’t going to happen.”

The chance of an audit may increase for self-employed taxpayers, Levy said, depending on their return. However, the odds may not change for traditional workers with an error-free filing, he said.

“The W-2 employee is much less likely to get audited than a self-employed person by far, in my opinion,” Levy said.

Of course, one of the best way to avoid future headaches is by keeping accurate records with detailed bookkeeping and saving all receipts, he said.

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With or without student loan forgiveness, college still costs too much

With or without student loan forgiveness, college still costs too much

The Biden administration has promised to make a decision on student loan forgiveness within weeks, or even days. And yet, college affordability will remain an issue for years to come, experts say.

Increasingly, high school students are rethinking the value of a four-year degree. Many now say it’s just not worth the sky-high cost.

“More and more people are asking ‘is college even worth it?'” said Jason Wingard, the president of Temple University and author of “The College Devaluation Crisis.”

More from Personal Finance:
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Inflation is making college even more expensive
Would you be included in student loan forgiveness?

“For 50 or 60 years, it was unquestionable; now, what we’re seeing is a flatline,” he added. “Higher education — for the first time — has to pivot in order to be relevant.”

The college system should be more responsive to rapidly evolving needs in the workplace to better position graduates for employment and career success, Wingard argued in his book.

Corporate hiring practices are starting to favor skills over credentials, he said. For higher education, “that means being more applied and not just theoretical.” (Some institutions have already slashed the academic programs that were once central to a liberal arts education.)

College is only getting more expensive

Temple University President Jason Wingard speaks during funeral services for the victims of a deadly row house fire, at Temple University in Philadelphia, Monday, Jan. 17, 2022.

A college education is now the second-largest expense an individual is likely to make in a lifetime — right after purchasing a home.

But it wasn’t always that way.

Deep cuts in state funding for higher education have contributed to significant tuition increases and pushed more of the costs of college onto students, according to an analysis by the Center on Budget and Policy Priorities, a nonpartisan research group based in Washington, DC

Schools are under continued pressure cut costs, admit more students who need less aid or raise tuition. This year, some colleges are hiking tuition as much as 5%, citing inflation and other concerns.

“We’re not getting more money from the state, and the market wants us to charge less,” Wingard said, but “every single cost is going through the roof,” he noted, referring to the rising expense of faculty, buildings and maintenance, books and materials, technology and cyber security. “It’s impossible to do that.”

“We need to make sure education is more affordable for students,” he added. “If the government can’t help make education more affordable, then students are going to stop considering higher education as a viable choice, as a valuable choice.

“This is a critical time.”

“I don’t believe that higher education should be this expensive,” said Kaya Jones, 23, who graduated from Temple in 2020 with a bachelor’s degree in political science and journalism.

To pay for school, Jones worked two jobs and relied on a combination of resources, including contributions from friends and family and student debt.

“It definitely took a whole village,” she said.

Jones is now a program coordinator at Ignite, a political leadership program for women, and still owes roughly $35,000 in loans, not including the Parent PLUS loan in her mother’s name.

Students want colleges that offer better value

For now, 83% of college students are completely, very or somewhat confident “they will earn enough money to make the cost of college worth it,” according to the 2022 College Confidence Index by GradGuard and College Pulse. Parents are less convinced: 63% are confident that a college education will allow their children to get a good job, and only 60% said it is worth the investment.

“Students and their families are prudent to evaluate the return on investment of college like other large consumer purchases,” said John Fees, co-founder and managing director of GradGuard, a tuition insurance provider. Further, “this has implications for how institutions operate,” he added.

There’s much more talk about pre-professionalism.

Eric Greenberg

president of Greenberg Educational Group

These days, students and parents want to get the best value for their college dollars, according to Eric Greenberg, president of the Greenberg Educational Group, a New York-based consulting firm.

“There’s much more talk about pre-professionalism,” he said.

Along with the cost and academic offerings, families should look at the preprofessional services, alumni networks, job placement and average salary just starting out, as well as 10 to 15 years down the road, he said. Then, Greenberg said, it “becomes less about the [name brand].”

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