Tax Plans and Bonus Credits
Competing tax plans give voters a lot to think about. The Washington Post reports on the choices presented by former President Donald Trump and Republicans in Congress versus Democratic President Joe Biden. Republicans want to extend tax cuts enacted in 2017 under Trump and perhaps lower rates even more for corporations. Trump has also proposed eliminating the taxation of tips as ordinary income. Meanwhile, President Biden and Democrats want to raise taxes on the wealthiest individuals and corporations and only keep portions of the Tax Cuts and Jobs Act targeting those making less than $400,000.
IRS adds more communities to those eligible for energy community bonus credits. Taxpayers’ clean energy projects in eligible census tracts can receive a 10 percent increase on their credit claims through the Inflation Reduction Act. IRS Notice 2024-48, issued June 7, lists the statistical areas and coal closure areas that are now eligible for the energy community bonus credit.
Medical cannabis users catch a break in Washington State. A new state law allows residents of the state who have a medical cannabis card to be exempt from the state’s cannabis tax. The cannabis tax in Washington—37 percent on recreational cannabis—generated nearly $470 million in fiscal year 2023, but with the change more people might seek medical cards.
New Jersey task force suggests reform of property tax breaks for those age 65 and over. TaxNotes reports (paywall) on the six-member group’s 13 recommendations. The group’s report suggests reforms for New Jersey’s two existing property relief programs and recommendations on implementing the Stay NJ program. That program goes into effect in fiscal year 2026 and will allow people aged 65 or older to claim a tax credit equal to 50 percent of their property tax bills, up to a maximum of $6,500 annually. Stay NJ would cost New Jersey $1.2 billion to $1.7 billion annually between fiscal years 2026 and 2028.
Tax cuts still to come in the UK, says Prime Minister Sunak. Prime Minister Rishi Sunak says the Conservative party platform will still include previously promised tax cuts, and that the cuts will be “fully funded and costed.” He assured that government spending on public services would continue to increase beyond inflation under his future Tory government, but acknowledged some departments might see spending cuts.
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