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US

Reconciliation bill includes nearly $80 billion for IRS funding

Reconciliation bill includes nearly $80 billion for IRS funding

Charles P. Rettig, commissioner of the Internal Revenue Service, testifies during the Senate Finance Committee hearing titled The IRS Fiscal Year 2022 Budget, in Dirksen Senate Office Building in Washington, DC, June 8, 2021.

Tom-Williams | Pool | Reuters

Senate Democrats on Sunday passed their climate, health and tax package, including nearly $80 billion in funding for the IRS.

Part of President Joe Biden’s agenda, the Inflation Reduction Act allocates $79.6 billion to the agency over the next 10 years. More than half of the money is meant for enforcement, with the IRS aiming to collect more from corporate and high-net-worth tax dodgers.

The remainder of the funding is earmarked for operations, taxpayer services, technology, development of a direct free e-file system and more. Collectively, those improvements are projected to bring in $203.7 billion in revenue from 2022 to 2031, according to recent estimates from the Congressional Budget Office.

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IRS audits have plunged over the past decade, with the biggest declines among the wealthy, according to a May 2022 report from the Government Accountability Office.

The audit rate for Americans making $5 million or more dropped to about 2% in 2019, compared to 16% in 2010, the report found. The agency said it is working to improve these numbers.

However, if the Inflation Reduction Act is approved by the House and signed into law, it will take time to phase in the added IRS funding, explained Garrett Watson, a senior policy analyst at the Tax Foundation. The Congressional Budget Office only estimates about $3 billion of the $203.7 billion in revenue for 2023.

“We didn’t get to this state with the agency overnight, and it will take longer than overnight to go in the right direction,” he said.

IRS: We won’t boost ‘audit scrutiny’ on the middle class

While advocates applaud the enhanced IRS budget, opponents argue the beefed-up enforcement may affect more than wealthy Americans, violating Biden’s $400,000 pledge.

“My colleagues claim this massive funding boost will allow the IRS to go after millionaires, billionaires and so-called rich ‘tax cheats,’ but the reality is a significant portion raised from their IRS funding bloat would come from taxpayers with income below $400,000, ” Sen. Mike Crapo, R-Idaho, ranking member of the Senate Finance Committee said in a statement.

IRS Commissioner Charles Rettig said the $80 billion in funding would not increase audits of households making less than $400,000 per year.

“The resources in the reconciliation package will get us back to historical norms in areas of challenge for the agency — large corporate and global high-net-worth taxpayers,” he wrote in a letter to the Senate.

“These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans,” he added.

More than two-thirds of registered voters support increasing the IRS budget to strengthen tax enforcement on high-income taxpayers, according to a 2021 poll from the University of Maryland.

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US

US Senate approves bill to fight climate change, cut drug costs in win for Biden

US Senate approves bill to fight climate change, cut drug costs in win for Biden

WASHINGTON, Aug 7 (Reuters) – The US Senate on Sunday passed a sweeping $430 billion bill intended to fight climate change, lower drug prices and raise some corporate taxes, a major victory for President Joe Biden that Democrats hope will aid their chances of keeping control of Congress in this year’s elections.

After a marathon, 27-hour weekend session of debate and Republican efforts to derail the package, the Senate approved the legislation known as the Inflation Reduction Act by a 51-50 party line vote Vice President Kamala Harris cast the tie-breaking ballot.

The action sends the measure to the House of Representatives for a vote expected Friday that could forward it, in turn, to the White House for Biden’s signature. In a statement, Biden urged the House to act as soon as possible and said he looked forward to signing the bill into law.

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“The Senate is making history,” an elated Senate Majority Leader Chuck Schumer said, after pumping his fists in the air as cheered Democrats and their staff members responded to the vote with a standing ovation.

“To Americans who’ve lost faith that Congress can do big things, this bill is for you,” he said. “This bill is going to change America for decades.”

Schumer said the legislation contains “the boldest clean energy package in American history” to fight climate change while reducing consumer costs for energy and some medicines.

Democrats have drawn harsh attacks from Republicans over the legislation’s $430 billion in new spending and roughly $740 billion in new revenue. read more

Nevertheless, Democrats hope its passage, ahead of an August recess, will help the party’s House and Senate candidates in the Nov. 8 midterm elections at a time when Biden is suffering from anemic public approval ratings amid high inflation.

The legislation is aimed at reducing carbon emissions and shifting consumers to green energy, while cutting prescription drug costs for the elderly and tightening enforcement on taxes for corporations and the wealthy.

Because the measure pays for itself and reduces the federal deficit over time, Democrats contend that it will help bring down inflation, an economic liability that has also weighed on their hopes of retaining legislative control in the run-up to the 2024 presidential election.

US Vice President Kamala Harris reacts as she speaks to the media about the passing of the “Inflation Reduction Act of 2022” on Capitol Hill in Washington, DC, US August 7, 2022. REUTERS/Ken Cedeno

Republicans, arguing that the bill will not address inflation, have denounced the measure as a job-killing, left-wing spending wish list that could undermine growth when the economy is in danger of falling into recession.

Democrats approved the bill by using a parliamentary maneuver called reconciliation, which allows budget-related legislation to avoid the 100-seat chamber’s 60-vote threshold for most bills and pass on a simple majority.

After several hours of debate, the Senate began a rapid-fire “vote-a-rama” on Democratic and Republican amendments on Saturday evening that stretched into Sunday afternoon.

Democrats repelled more than 30 Republican amendments, points of order and motions, all intended to scupper the legislation. Any change in the bill’s contents wrought by an amendment could have unraveled the Democrats’ 50-senator coalition needed to keep the legislation on track.

NO CAP ON INSULIN COSTS

But they were unable to muster the votes necessary to retain a provision to cap soaring insulin costs at $35 a month on the private health insurance market, which fell outside the reconciliation rules. Democrats said the legislation would still limit insulin costs for those on Medicare.

In a foreshadowing of the coming fall election campaign, Republicans used their amendment defeats to attack vulnerable Democrats who are seeking reelection in November.

“Democrats vote again to allow chaos on the southern border to continue,” Senate Republican leader Mitch McConnell said in a statement that named Democratic Senators Mark Kelly of Arizona, Catherine Cortez Masto of Nevada, Maggie Hassan of New Hampshire and Raphael Warnock of Georgia. All four are facing tight contests for reelection.

The bill was more than 18 months in the making as Biden’s original sweeping Build Back Better plan was whittled down in the face of opposition from Republicans and key legislators from his own party.

“It required many compromises. Doing important things almost always does,” Biden said in a statement.

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Reporting by Richard Cowan, Rose Horowitch, David Morgan and Makini Brice; Editing by Scott Malone, Mary Milliken, Lisa Shumaker and Cynthia Osterman

Our Standards: The Thomson Reuters Trust Principles.

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Entertainment

The Seekers singer Judith Durham will receive a state funeral in Victoria

The Seekers singer Judith Durham will receive a state funeral in Victoria

The Seekers lead singer Judith Durham will be honored at a state funeral, Victorian Premier Daniel Andrews has confirmed.

Durham died on Friday, aged 79.

She has been remembered as an Australian treasure with the voice of an angel.

Her band mates, Athol Guy, Bruce Woodley and Keith Potger, said their lives had been changed forever by losing “our treasured lifelong friend and shining star.”

Premier Daniel Andrews announced on Twitter that after speaking with Ms Durham’s family, they accepted the offer of a state funeral to honor her life and contribution to music.

Mr Andrews described Ms Durham as a “true icon of Australian music”.

Judith Durham, who has brown hair with a fringe, smiles with softly crinkled eyes.
Judith Durham was a girl from Melbourne who became a superstar.(AAP: Julian Smith)

Durham was born Judith Mavis Cock in the Melbourne suburb of Essendon in 1943.

She changed her name to her mother’s maiden name at the age of 19.

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US

US Senate Democrats battle to pass $430 billion climate, drug bill

US Senate Democrats battle to pass $430 billion climate, drug bill

WASHINGTON, Aug 6 (Reuters) – The US Senate on Saturday began debating a Democratic bill to address key elements of President Joe Biden’s agenda – tackling climate change, lowering the costs of medication for the elderly and energy, while forcing corporations and the wealthy to pay more taxes.

The debate began after the Senate voted 51-50 to move ahead with the legislation. Vice President Kamala Harris broke a tie vote, with all 50 Republicans in opposition.

The Senate was set to debate the bill for up to 20 hours before diving into an arduous, time-consuming amendment process called a “vote-a-rama.”

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Democrats and Republicans were poised to reject each other’s amendments, as Senate Majority Leader Chuck Schumer maneuvered to keep a his 50-member caucus united behind a bill that was negotiated over several months. If even one Democrat were to peel off, the entire effort would be doomed in the evenly split 50-50 Senate. read more

Earlier in the day, the Senate parliamentarian determined that the lion’s share of the healthcare provisions in the $430 billion bill could be passed with only a simple majority, bypassing a filibuster rule requiring 60 votes in the 100-seat chamber to advance most legislation and enabling Democrats to pass it over Republican objections.

Democrats hope that the legislation will give a boost to their candidates in the Nov. 8 midterm elections in which Biden’s party is in an uphill battle to retain its narrow control of the Senate and House of Representatives. The Democrats cast the legislation as a vehicle to combat inflation, a prime concern of US voters this year.

“The bill, when passed, will meet all of our goals: fighting climate change, lowering healthcare costs, closing tax loopholes abused by the wealthy and reducing the deficit,” Schumer said in a Senate speech.

There are three main parts to the bill’s tax provisions: a 15% minimum tax on corporations and the closing of loopholes that the wealthy can use to avoid paying taxes; tougher IRS enforcement; and a new excise tax on stock buybacks.

The legislation has $430 billion in new spending along with raising more than $740 billion in new revenues. read more

Democrats have said the legislation by 2030 would result in a 40% reduction in US carbon emissions, blamed for climate change.

‘PRICE-FIXING’

The measure would also allow the Medicare government health insurance program for the elderly to begin negotiating in 2026 with the pharmaceutical industry over prices on a limited number of prescription drug prices as a way of reducing costs. It also would place a $2,000-per-year cap on out-of-pocket medication costs under a Medicare drug program.

Senate Republican Leader Mitch McConnell attacked the provision involving negotiating drug prices, comparing it to past “price-fixing” attempts by countries such as Cuba, Venezuela and the former Soviet Union.

“Their policy would bring about a world where many fewer new drugs and treatments get invented in the first place as companies cut back on R&D,” McConnell said in a floor speech, referring to research and development.

While senators debated the policies embedded in the bill, its political ramifications were also on display.

In a speech at the Conservative Political Action Conference (CPAC) on Saturday, former President Donald Trump predicted fallout for Kyrsten Sinema and Joe Manchin, two key Democratic senators: “If this deal passes, they are both going to lose their next elections.”

But Manchin and Sinema are not up for re-election until 2024 and many of the provisions of the bill are popular with voters.

The legislation is a scaled-down version of a far broader, more expensive measure that many Democrats on the party’s left had hoped to approve last year. That measure stalled when Manchin, a centrist, balked, complaining that it would exacerbate inflationary pressures.

The bill calls for billions of dollars to encourage the production of more electric vehicles and foster clean energy, though automakers say sourcing rules will sharply limit how many electric vehicles qualify for tax credits.

It would also set $4 billion in new federal drought relief funds, a provision that could help the re-election campaigns of Democratic Senators Catherine Cortez Masto in Nevada and Mark Kelly in Arizona.

One provision cut from the bill would have forced drug companies to refund money to both government and private health plans if drug prices rise more quickly than inflation.

Independent Senator Bernie Sanders, a leading progressive, has criticized the bill for failing to go far enough and said he planned to offer amendments that would revive a series of social programs he pushed last year, including broadening the number of prescription drugs Medicare could negotiate prices on and providing government-subsidized dental, vision and hearing aid.

His amendments were expected to fail.

Republicans have signaled that they will offer amendments touching on other issues, including controlling immigrants coming across the US border with Mexico and enhancing policing to curtail rising crime rates in American cities since the onset of the COVID-19 pandemic.

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Reporting by Richard Cowan and Makini Brice; additional reporting by Valerie Volcovici, David Shepardson and Kanishka Singh; Editing by Will Dunham, Scott Malone and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

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US

Key US Senator Sinema agrees to $430 billion drug, energy bill

Key US Senator Sinema agrees to $430 billion drug, energy bill

WASHINGTON, Aug 4 (Reuters) – Democratic US Senator Kyrsten Sinema said on Thursday she agreed to “move forward” on a $430 billion drug pricing, energy and tax bill, subject to a Senate arbitrator’s approval of the bill, which Democrats intend to pass over Republican objections.

Senate Majority Leader Chuck Schumer said earlier on Thursday the chamber would convene on Saturday to vote on a motion to proceed and then begin debate on the bill.

The bill known as the Inflation Reduction Act, introduced last week by Schumer and Democratic Senator Joe Manchin, is a key priority for Democrats and President Joe Biden ahead of November’s election battle for control of the US Congress.

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The act will help people save money on prescription drugs and health premiums, Biden said in a statement on Thursday.

“It will make our tax system more fair by making corporations pay a minimum tax,” he said.

With the 100-seat Senate split 50-50, Democrats plan to pass the bill without Republican support through a parliamentary process known as reconciliation.

But they cannot afford to lose support from a single lawmaker. Sinema’s agreement was a critical breakthrough. Another worry is COVID-19 – senators can only vote in person, so Schumer will need his full caucus to be present and healthy to pass the measure if Republicans remain unified in opposition.

Sinema said she had reached an agreement with other Democrats to remove a provision that would impose new taxes on carried interest. Without the provision, private equity and hedge fund financiers can continue to pay the lower capital gains tax rate on much of their income, instead of the higher income tax rate paid by wage-earners.

She cautioned that her agreement to “move forward” was subject to the review of the Senate parliamentarian. The parliamentarian has to approve the contents of the bill to allow it to move forward through the “reconciliation” process that Democrats plan to use to bypass the chamber’s normal rules requiring 60 Senators to agree to advance most legislation.

Schumer, in a statement, said, he believed he now had the votes to pass the bill.

“The agreement preserves the major components of the Inflation Reduction Act, including reducing prescription drug costs, fighting climate change, closing tax loopholes exploited by big corporations and the wealthy, and reducing the deficit by $300 billion,” Schumer said.

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Reporting by Scott Malone, Additional reporting by Shivani Tanna in Bengaluru; Editing by Daniel Wallis, Shri Navaratnam and Tom Hogue

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Categories
Australia

WA infrastructure advisory body floats per-kilometre charge to ease traffic pressure

WA infrastructure advisory body floats per-kilometre charge to ease traffic pressure

Infrastructure WA, the body charged with advising the Premier’s Department on the state’s medium and long-term infrastructure needs, has proposed overhauling road funding by eventually replacing the fuel excise with a road-user charge that also creates incentives to reduce congestion.

The wide-ranging 20-year plan, Foundations for a Stronger Tomorrow, was tabled in State Parliament on Wednesday.

One of the 93 recommendations involves planning for the eventual transition from internal combustion to electric vehicles and how road infrastructure will be funded with the decrease of the fuel excise.

Nicole Lockwood, chair of Infrastructure WA, told Nadia Mitsopoulos on ABC Radio Perth that while the switch to electric vehicles would be “fantastic for the environment and climate change,” it also posed challenges.

“It does mean that the revenue source that comes from our fuel at the moment, that goes towards paying for our roads, will diminish over time,” she said.

“SW [the recommendation] is trying to find a mechanism where the government still has the ability to fund that infrastructure in a way that doesn’t disincentivize people from moving towards electric vehicles.”

EV tax coming in 2027

While the state government has already announced it will introduce a 2.5 cent per kilometer charge for EV’s from mid-2027, Infrastructure WA’s recommendation 58 goes further, proposing that WA work with other states to develop a nationally consistent road user charge that could influence driver behaviour. .

“The scheme has the potential to include vehicle mass, distance, location and time-of-day pricing elements,” the recommendation says.

Such a scheme could potentially charge different rates for road usage in peak hours, or differential rates for different roads.

A mix of cars and trucks fill four lanes of peak hour traffic on the freeway.
Ms Lockwood says the report recommends looking at ways to influence congestion and road use.(ABC News: Andrew O’Connor)

“What we’ve said is, let’s design a mechanism that has flexibility, so that in time if we wanted to use those levers we could,” Ms Lockwood said.

“We saw it very starkly during COVID, when people were not using the roads during the day, at certain times suddenly we had huge amounts of capacity.

“In the future, when we can’t continue to build more lanes, we will need other mechanisms to be able to manage demand on the system.”

The proposal met with a mixed response from ABC Radio Perth listeners:

Mike: “Again lower socio-economic people who cannot afford to live close to work will pay the most, the system working to keep the gap between the haves and the have nots.”

Greg: “The state government is not incentivizing enough the use of electric vehicles. The proposed road tax is a major disincentive. The benefit to the environment is the major issue and there won’t be the gains there should be. We pay for our roads Mainly via our local government rates so EV drivers will be paying double if we get this bad policy.”

Cynthia: “Surely a toll on cars with only one occupant would make sense? Or a fast lane for cars with two occupants.”

An artist's impression of people walking on Hay Street Mall with light rail lines in the background and a train in the background.
While Max Light Rail was shelved in 2016, Infrastructure WA recommended future planning around light rail and rapid bus networks.(Supplied: PTA)

Planning for light rail mooted

The report also recommends the state government look again at the role of light rail and rapid bus transit in Perth’s public transport mix.

A previous plan to link Perth suburbs through the Max Light Rail network was shelved by the Barnett government in 2016, and the McGowan government has been focused on delivering its expansion of the heavy rail network, Metronet.

Ms Lockwood said a plan to link people across suburbs and between stations was still needed.

“We very much back the government’s commitments to Metronet and the heavy rail system, but what we see in the future is a need to look at the next tier of connection for the city,” she said.

“That mid-tier public transport system that links buses and other parts of the network into the Metronet network is really important.

“Part of that is about making sure that the [already identified transport] corridors are protected.

“We really have to think about the spaces we’ve got and how we use them… then the state government needs to then pull a plan together to map that out for the whole of the metro area,” she said.

The infrastructure report also recommended a new desalination plant at Alkimos, a whole-of-government emissions reduction target and a package to reform hospital emergency departments.

The WA Government has six months to respond to the report and is obliged by legislation to respond to each recommendation as well as provide an implementation plan for the ideas that it accepts.

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US

Why IRS’ $80B expansion is a ‘nightmare’ for small businesses

Why IRS' $80B expansion is a 'nightmare' for small businesses

Small business owners may soon be in for a lengthy and expensive battle with the IRS, tax experts warn.

A key provision in the Inflation Reduction Act — which throws an extra $80 billion to the IRS to improve the agency’s collection of under-reported income — will end up targeting small business owners to pay for the legislation, according to nonpartisan watchdog the Joint Committee on Taxation.

The group estimates that between 78% and 90% of the estimated additional $200 billion the IRS will collect will come from small businesses making less than $200,000 annually.

Just 4% to 9% would come from businesses making north of $500,000 a year — meaning the legislation is in sharp contrast to President Biden’s longstanding claim that he wouldn’t raise taxes on anyone making less than $400,000.

“The IRS will have to target small and medium businesses because they won’t fight back,” Joe Hinchman, executive vice president at the National Taxpayers Union Foundation, told The Post. “We’ve seen this play out before … the IRS says ‘We’re going after the rich’ but when you’re trying to raise that much money, the rich can only get you so far.”

I.R.S.
Increasing the number of IRS agents could hurt small businesses most.
Getty Images

In fact, going after the lower and middle class can actually be more lucrative for IRS auditors than trying to get more money from the wealthy. “The rich have their lawyers and fight it — that’s why the poor are easier to go after,” Hinchman adds.

Accordingly, tax experts warn that the IRS’s audits will be far more painful and costly for small business owners — even for those who think they’re filing their taxes correctly.

manchin
Sens. Joe Manchin and Chuck Schumer have reached a deal that would give the IRS an extra $80 billion.
Getty Images

“Most small businesses aren’t doing anything wrong,” Daniel Bunn, executive vice president at the Tax Foundation, told The Post. “We don’t make the tax code simple and the complicated tax code makes it difficult for small business owners to comply with all the requirements.”

Even if small business owners get everything right, they may still be faced with a headache since part of the IRS expansion will involve sending out more notices and letters to businesses, Bunn adds. For individual contractors or small businesses, an IRS letter that they owe more money or made an error on their taxes can put them underwater.

“Anytime you get an IRS letter, it could take months or years to get it settled — we’re talking many thousands of dollars to address,” Bunn added. “Large companies have constant reviews and lawyers going through everything… small business doesn’t have the resources to fight back in the way.”

The White House has dismissed claims the bill will hurt lower- and middle-income Americans, instead noting the JCT estimate doesn’t take into account how much the bill will offset costs for average Americans like prescription drugs.

But tax experts aren’t so sanguine about the reality of giving the IRS more resources.

“The approach here is to double the IRS workforce, take the leash off, and see how much they can collect,” Hinchman adds. “I think they’ll collect it but it will be quite painful.”

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Categories
US

Why IRS’ $80B expansion is a ‘nightmare’ for small businesses

Why IRS' $80B expansion is a 'nightmare' for small businesses

Small business owners may soon be in for a lengthy and expensive battle with the IRS, tax experts warn.

A key provision in the Inflation Reduction Act — which throws an extra $80 billion to the IRS to improve the agency’s collection of under-reported income — will end up targeting small business owners to pay for the legislation, according to nonpartisan watchdog the Joint Committee on Taxation.

The group estimates that between 78% and 90% of the estimated additional $200 billion the IRS will collect will come from small businesses making less than $200,000 annually.

Just 4% to 9% would come from businesses making north of $500,000 a year — meaning the legislation is in sharp contrast to President Biden’s longstanding claim that he wouldn’t raise taxes on anyone making less than $400,000.

“The IRS will have to target small and medium businesses because they won’t fight back,” Joe Hinchman, executive vice president at the National Taxpayers Union Foundation, told The Post. “We’ve seen this play out before … the IRS says ‘We’re going after the rich’ but when you’re trying to raise that much money, the rich can only get you so far.”

I.R.S.
Increasing the number of IRS agents could hurt small businesses most.
Getty Images

In fact, going after the lower and middle class can actually be more lucrative for IRS auditors than trying to get more money from the wealthy. “The rich have their lawyers and fight it — that’s why the poor are easier to go after,” Hinchman adds.

Accordingly, tax experts warn that the IRS’s audits will be far more painful and costly for small business owners — even for those who think they’re filing their taxes correctly.

manchin
Sens. Joe Manchin and Chuck Schumer have reached a deal that would give the IRS an extra $80 billion.
Getty Images

“Most small businesses aren’t doing anything wrong,” Daniel Bunn, executive vice president at the Tax Foundation, told The Post. “We don’t make the tax code simple and the complicated tax code makes it difficult for small business owners to comply with all the requirements.”

Even if small business owners get everything right, they may still be faced with a headache since part of the IRS expansion will involve sending out more notices and letters to businesses, Bunn adds. For individual contractors or small businesses, an IRS letter that they owe more money or made an error on their taxes can put them underwater.

“Anytime you get an IRS letter, it could take months or years to get it settled — we’re talking many thousands of dollars to address,” Bunn added. “Large companies have constant reviews and lawyers going through everything… small business doesn’t have the resources to fight back in the way.”

The White House has dismissed claims the bill will hurt lower- and middle-income Americans, instead noting the JCT estimate doesn’t take into account how much the bill will offset costs for average Americans like prescription drugs.

But tax experts aren’t so sanguine about the reality of giving the IRS more resources.

“The approach here is to double the IRS workforce, take the leash off, and see how much they can collect,” Hinchman adds. “I think they’ll collect it but it will be quite painful.”

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Categories
US

Sinema eyes changes to tax, climate portions of reconciliation bill

Sinema eyes changes to tax, climate portions of reconciliation bill

Sen. Kyrsten Sinema (D-Ariz.) is eyeing changes to Democrats’ $740 billion reconciliation bill — specifically increasing climate funding and restructuring the tax provisions — as the Senate moves rapidly toward final passage before the August recess, Axios has learned.

Why it matters: Sinema is the one senator potentially standing in the way of Democrats clinching President Biden’s longtime goal of passing an ambitious package tackling climate change, health care and taxes — renamed the “Inflation Reduction Act of 2022.”

  • That position gives her a huge amount of leverage as Democrats await a verdict from the Senate parliamentarian on whether the bill complies with the “Byrd Rule,” which controls what provisions can be included in the budget reconciliation process.
  • The fact the negotiations were conducted entirely in secret between Senate Majority Leader Chuck Schumer (DN.Y.) and Sen. Joe Manchin (DW.V.) — catching Sinema by surprise — has left her space for an 11th hour intervention.
  • Sinema has so far refused to weigh in on whether or not she will support the bill until the parliamentarian renders her judgment on the measure.

What we’re hearing: Sinema is looking at significantly beefing up the reconciliation bill’s funding for droughts and water security in the Southwest, sources familiar with her thought process tell Axios.

  • She views the current $369 billion climate and energy portion of the bill as insufficient for addressing threat resilience funding.

On taxes, Sinema has concerns with the structure of the 15% corporate minimum “book tax” and whether the burden could get passed down to employees, the sources said.

  • Sinema supports cracking down on tax avoidance, but has long voiced her opposition to closing the carried interest loophole.
  • She’s concerned that the provision, which would contribute $14 billion toward paying down the bill’s $740 billion total, could undermine economic competitiveness, the sources said.

Behind-the-scenes: Sinema has been meeting privately, both virtually and in-person, with key stakeholders in Arizona as she continues to work through her assessment of the bill.

  • Sinema last week visited Flagstaff, Arizona, where she met with local officials who are still reeling from recent flooding and a wildfire that ravaged the state.
  • Arizona is one of the fastest-warming states in the US, and the state’s largest county, Maricopa County, has already hit a record for heat-related deaths this year.
  • “There are some who were surprised to learn Kyrsten was enthusiastic about the climate provisions last year, because they rightly consider her a centrist. But she’s a Senator from Arizona, first and foremost,” John LaBombard, Sinema’s former communications director and SVP at ROKK Solutions tells Axios.

in to phone call tuesday with Arizona’s Chamber of Commerce, local business leaders and manufacturers discussed with Sinema what the proposed 15% corporate minimum tax and closure of the carried interest loophole would mean for Arizona.

  • The private equity industry, which has contributed heavily to Sinema, is lobbying her heavily on shooting down the carried interest portion.
  • “I remember last year, she was hearing feedback from small business owners, concerned about the potential implications of any tax policy changes, and how it might affect their capital investment streams,'” LaBombard said.
  • “She is somebody who errs on the side of caution when it comes to changing tax policies. … obviously, I think [their input] shaped where she is on the economic parts of this bill.”

What they’re saying: “What’s clear from our conversation is she’s taking a thoughtful and diligent approach as she considers her position on this legislation,” Danny Seiden, CEO of the Arizona Chamber, told Axios’ Hans Nichols.

  • “She was very interested in learning what specific impacts the tax provisions will have on Arizona manufacturers — and we believe she will consider these implications seriously as negotiations continue over the coming days.”

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Categories
Business

Your pint of beer could soon set you back $15, thanks to the latest tax hike

Your pint of beer could soon set you back $15, thanks to the latest tax hike

Australians face a big rise in the cost of a pint, with the country’s beer tax recording its biggest increase in more than 30 years.

As of Monday August 1, the beer tax goes up to 4 per cent, adding about 80-84 cents to the cost of a pint of the much-loved amber liquid. This means you may soon be paying $15 for your favorite glass.

And there’s no escape for those who buy their beer by the slab. The beer tax will rise from $53.59 to $55.73 per liter of the beverage’s alcohol content, raising the tax on a carton about 80c, to $18.80.

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The tax on a keg will jump about $4, raising the cost to almost $74.

Because of this price hike, Brewers Association of Australia chief executive John Preston warned that patrons might now have to fork out $15 for a pint at their local pub or bar.

“For a small pub, club or other venue the latest tax hike will mean an increase of more than $2700 a year in their tax bill – at a time when they are still struggling to deal with the ongoing impacts of the pandemic,” he said .

The biannual alcohol excise is based upon the consumer price index (CPI), which is a measure of the average change over time in the prices paid by households for a fixed number of goods and services.

According to the ABS, the June CPI increased by 6.1 per cent over the last 12 months, with goods accounting for 79 per cent of the rise this quarter.

Due to the tax increase, patrons may now have to pay $15 for a pint at their local pub or bar. Credit: Getty Images

Publican of the Royal Albert Hotel in Sydney’s Surry Hills, Michael Bain, said that while the increase was certainly high, beer tax increased twice a year every year (in February and August), meaning the issue isn’t a particularly new one.

“These price rises … just keep affecting us all the time,” he said.

“Because of COVID, I think a lot of people didn’t put the excise on…so I think this is why it’s affected us more this time.

“Especially some of the craft brewers that we use, they’ve been absorbing those CPI increases. But even the small guys now are going to have to pass it on, so it will mean a price rise across the board for us.”

Preston said the industry had seen “almost 20 increases in Australia’s beer tax over the past decade alone”.

“Australians are taxed on beer more than almost any other nation,” he said.

If patrons are forced to pay $15 for a pint of beer, Bain said he believes people will still buy it, but may buy fewer beers.

“Instead of buying three beers, they’ll buy two. I think they really will buy one less,” he said.

Federal Treasurer Jim Chalmers. Credit: AAP

According to Preston, breweries and pub and club operators were “extremely disappointed” when the former government did not deliver its proposed beer tax reduction in this year’s budget, and that the new Treasurer, Jim Chalmers, has now “inherited” the Liberals’ problem .

“We believe there is a strong case for beer tax relief to be provided by the new federal government, with the hidden beer tax to go up again in February 2023,” he said.

Bain agrees, saying another possible solution could be cutting down the tax from twice a year to once a year.

“I’m not saying they shouldn’t do it and we need to pay taxes for health care and all that kind of stuff, but at what point do you just keep gouging everyone?

“You can’t keep incrementally adding on all the time at these massive rates

“(It’s) kinda like you’re absolutely smashing people with tax.”

Chalmers was contacted for comment.

Cyclist flies into the crowd after major crash

Cyclist flies into the crowd after major crash

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