An interest rate hike of 0.25 percentage point could be the last for a while, the Fed says. the federal reserve high interest rates for the 10th time in about a year, and indicated it will halt increases, all as the economy slows and recession fears mount.
Meanwhile, the Treasury’s cash balance is low. He The Treasury Loan Advisory Committee indicates that the US government’s current cash balance is $238 billion below recommended levels, and “significantly below what even the nation’s largest banks have in available liquidity despite managing significantly smaller balance sheets.
For House Republicans, tax increases are an option now. While almost all Limit, Save, and Grow (LSG) Deficit Reduction and Debt Limit BillThe $4.8 trillion deficit reduction would come from spending cuts, the Congressional Joint Committee on Taxation shows the bill saves about $515 billion over the next decade by repealing green energy tax credits that were included in last year’s Cut Inflation Act. TPC’s Howard Gleckman writes: “For the House GOP this is… uncomfortable… The new GOP bill eliminates credits without compensatory cuts, part of the no new tax promise made in 1986.
TPC Analysis: Those House GOP tax increases would hit all households, especially high-income ones. TPC’s John Buhl highlights the latest TPC model. Repealing clean energy tax incentives in exchange for a temporary increase in the federal debt limit would reduce 2024 after-tax income by an average of 0.2 percent ($810) for those in the top 20 percent of earners (who earn at least $195,000 a year), while low- and middle-income households would face smaller increases.
Thirty-one Democratic senators urge the IRS to simplify tax filing and expand free electronic filing. lawmakers have written a letter IRS Commissioner Danny Werfel, urging the agency to simplify the tax filing process and expand access to free e-file options. youThey argue that recent investments from the Cut Inflation Act can help the IRS modernize and restore confidence in the integrity of the US tax system. The IRS expected to finalize its report on direct electronic filing this month.
And members of the Senate Finance Committee want the IRS to protect itself from the misuse of AI. Led by Sen. Maggie Hassan (D-NH), they have called on the IRS to “use every tool at its disposal” to counter tax scams generated by artificial intelligence in its May 1 letter to the agency, Tax Notes share (wall of payment). ChatGPT, for example, can make the targeted communication used in cybercriminal attacks more effective.
E-bike, or not e-bike? It shouldn’t be a matter of taxes. TPC tax sleuth Renu Zaretsky examines the E-BIKE (Electric Bike Incentive for the Environment) Act. Her goal is to encourage Americans to own and use electric bikes by offering a refundable tax credit worth 30 percent of the price of an electric bike, up to $1,500. But why? The electric bike market is already flourishing. And for those who can’t afford luxuries, an electric bike is still an expensive transaction to manage while waiting for a tax refund. Renu concludes that the credit would “reward some e-bike buyers for doing something they planned to do, and could already afford, anyway.”
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Register here to receive it in your inbox on weekdays at 8:00 am (only on Mondays when Congress is in recess). We welcome suggestions for new research or other news. Email Renu Zaretsky at [email protected].