Spending Progress, A Shrinking Tax Base, Another Digital Tax, And A Trial
The IRS has so far spent $4.4 billion in IRA funding through the first quarter of 2024. The Treasury Inspector General for Tax Administration shared its report last week on IRS spending of Inflation Reduction Act funds through March 31, 2024. In the first quarter of 2024, the IRS spent $863 million, of which $230.3 million funded business systems modernization; $193.3 million funded taxpayer services; $126.7 million funded enforcement; and $312.6 million funded operations support.
When it comes to stocks, who’s left to tax? TPCs Steve Rosenthal and former TPC colleague Livia Mucciolo have a new paper that answers that question. They highlight their main findings: From 1965 to 2022, the share of outstanding US stock that was held in taxable brokerage and mutual fund accounts declined from 79 percent to 27 percent. The share of publicly traded stock that was held in taxable accounts similarly declined from 81 percent to 28 percent. Policymakers who seek to broaden the base of corporate earnings that are taxed have their work cut out for them.
A digital advertising tax in California? Last week the California State Assembly added an amendment to a property tax bill that would adopt a digital advertising tax effective Jan. 1, 2025. The provision is similar to Maryland’s Digital Advertising Gross Revenues Tax, currently under consideration in the Maryland Tax Court. California’s proposed digital advertising tax would apply to the global annual gross revenues derived from digital advertising services in the state. The revenue would need to be at least $100 million for the tax to apply, and it would include revenues unrelated to digital advertising.
The “Panama Papers” trial has begun. In 2016, the International Consortium of Investigative Journalists exposed alleged tax evasion related to the offshore holdings of 12 current and former world leaders and shared details of financial dealings of over 120 politicians and celebrities. This week, 27 people went on trial for money laundering in connection with the scandal. The group includes Jurgen Mossack and Ramon Fonseca Mora, the founders of the now-defunct law firm at the center of the case.
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