IRS Targets Basis Shifting | Tax Policy Center
Close a loophole, collect billions more in tax revenue? The Treasury Department yesterday announcedplans to crack down on the use of complicated structures shielding tens of billions of dollars from taxation. It’s known as basis shifting, a tactic used by high-end business partnerships (hedge funds, real estate investors) to move assets on paper from one entity to another. “These transactions don’t create any economic activity for the US,” said Deputy Treasury Secretary Wally Adeyemo. “Their sole purpose is to reduce tax bills.” Absent these transactions, tax collections from partnerships could grow by at least $5 billion a year over the next decade. Robert Kovacev, a lawyer at Miller & Chevalier, told The Washington Post that businesses are not doing anything wrong and indicated the rule would be challenged in court.
What might happen if tips were exempt from taxes? TPC’s Howard Gleckman reviews the idea floated by former President Donald Trump last week. Exempting all tips from federal tax would likely benefit few tipped workers and cause many issues.
What about a 10 percent across-the-board tariff? Bloomberg takes a closer look at another idea raised by former President Donald Trump: a 10 percent across-the-board tariff on imports. Bloomberg cites recent reports from the Center for American Progress and the Peterson Institute for International Economics, estimating the policy could cost the average middle-income family between $1500 to $1700 per year.
In Vermont, property taxes will go up. The state legislature overrode Republican Gov. Phil Scott’s veto of legislation to help boost public school funding. The legislation is projected to raise property taxes by 13.8 percent on average. The increase is tied to a $180 million increase in school spending. Aside from rising inflation, VTDigger notes that spending has gone up in part because of health care costs, student mental health needs, and ailing infrastructure.
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