House GOP Tax Plan Hits This Week; IRS Getting Worked Over But It's Still Working
By Renu Zaretsky :: February 25th, 2014
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The House GOP offers its opening gambit in tax reform. The plan, due to be released on Wednesday by House Ways & Means Committee Chair Dave Camp, would cut the top individual tax rate to 25 percent. However, it would also impose a 10 percent surtax on high-income households, The Washington Post reports.
The IRS is taking its lumps. the House Oversight Committee has scheduled a hearing Thursday on proposed new IRS guidelines on political activity by 501(c)(4) non-profits. At the same time, Camp has warned the IRS that his panel might subpoena agency documents on its past handling of nonprofits’ tax-exempt status applications. Meanwhile, the IRS soldiers on, reporting that it has issued more income tax refunds so far this year than last. And yesterday it released a report on Criminal Investigation that highlights increased enforcement against tax criminals and more convictions for identify theft.
Today the Senate Budget Committee holds a hearing on the “Economic and Budget Outlook for Individuals, Families, and Communities” following CBO’s budget outlook released earlier this month. As you consider the budget, it’s worth remembering that individual income taxes may generate half of all federal tax revenue within a decade, comprising nearly all the projected rise in revenues.
New Jersey may see a huge battle over taxes and state employee pensions this year. Governor Chris Christie is about to release a budget that may include broad tax cuts and reductions in public pensions. What do these retirement changes mean for a state’s ability to attract and keep good workers? Rich Johnson, Gene Steuerle, and Caleb Quakenbush explore that issue with New Jersey as a case study in this Urban Institute paper.
Speaking of pension reforms, what if citizens could ‘see’ the financial health of public pensions? A new Blue Ribbon Panel report from the Society of Actuaries recommends more transparency. Its proposed liability measurement “would provide new insight into the market risks for pension plans and the shortfall that might have to be made up by local taxpayers if investment returns did not measure up to expectations.”