The Joint Committee on Taxation (JCT) estimates that extending the 2017 tax law’s expiring provisions, coupled with proposed GOP tax cuts, will cost $7 trillion over ten years. This surpasses previous estimates of $4.6 trillion, with the extension alone projected at $5.5 trillion. Senate Republicans’ additional $1.5 trillion in cuts further inflate the cost. Democrats strongly criticized the plan, citing its detrimental impact on the national debt and its disproportionate benefits to the wealthy.
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Contrary to initial reports suggesting a shift towards tax hikes, President Trump’s current focus on tariffs is framed as a tax cut for American citizens, offsetting perceived unfair practices by foreign nations. This approach contrasts with his previous emphasis on broad-based tax cuts. Leavitt clarified that the tariffs are specifically targeted at countries deemed to be exploiting the United States. The President remains committed to his campaign promises of tax cuts on tips, overtime pay, and Social Security benefits, anticipating Congressional approval later in the year.
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Germany’s Left Party, currently polling near the parliamentary threshold, has unveiled a sweeping tax plan aiming to halve billionaire wealth within a decade. The proposal includes reintroducing a wealth tax with a sliding scale, a one-time levy on the wealthiest 0.7%, increased inheritance and income taxes for high earners, and a revised capital gains tax. Despite these ambitious goals, the party’s prospects for implementing this plan remain uncertain due to their historically low support and potential difficulties in forming coalitions. The plan’s release comes as Germany prepares for national elections.
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Nominee Scott Bessent, President-elect Trump’s pick for Treasury Secretary, testified before the Senate Banking Committee, prioritizing the extension of the 2017 Tax Cuts and Jobs Act as the most crucial economic issue. He argues that failing to extend these cuts, which disproportionately benefit the wealthy, would lead to economic calamity. Despite accusations of tax evasion and opposition to raising the minimum wage, Bessent’s confirmation is anticipated. The proposed extension would cost an estimated $4 trillion over a decade, a cost Bessent claims could be offset through other budget cuts.
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Since receiving increased funding in 2022, the IRS has recovered $4.7 billion in back taxes and criminal proceeds, including $1.3 billion from wealthy tax evaders and $2.9 billion from criminal investigations. These collections, which also benefited from whistleblower information, come as Republicans, who will control Congress, plan to revisit tax laws and potentially reduce IRS funding. Despite facing future budget uncertainty, including $20 billion in potentially rescinded funds, IRS Commissioner Danny Werfel expressed confidence in the agency’s ability to adapt to any upcoming legislative changes. The future of the IRS’s funding and leadership remains uncertain with a potential new commissioner nominated by Donald Trump.
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John Q. Hosedrinker