To Make Money, You Have To Spend Money
House Republican plan to offset the cost of aid to Israel would actually increase the deficit by $90 billion over ten years. The House plan released by Speaker Mike Johnson (R-LA) this week would pay for $14 billion in proposed aid to Israel with cuts to the IRS budget. The Congressional Budget Office found it add $12.5 billion to the deficit over the next ten years, due to reduced revenue collections resulting from fewer resources for enforcement. IRS Commissioner Danny Werfel thinks the revenue loss could be much larger. “This type of the cut, over the cost of the Inflation Reduction Act, would actually cost taxpayers $90 billion — that’s with a ‘B,’” Werfel told The Washington Post. His assertion is based on IRS modeling that shows a 6-to-1 ratio of money spent on tax enforcement to revenue collected.
New electric car rules and a tool… Politico reports on the planned release of rules on accessing the electric vehicle (EV) tax credit, which is worth up to $7,500 per vehicle. The Biden administration is hoping to encourage the development of a domestic EV supply chain. But getting more EVs on the road faster may require more lenient restrictions on vehicles with batteries and minerals from China, which currently dominates that market. Meanwhile, the IRS announced yesterday an online tool through which sellers of clean vehicles can register.
Americans have another year to file Canadian taxes on their “underused” housing in Canada. The Canadian government announced an extension of the Underused Housing Tax 2022 filing deadline to April 30, 2024. The tax is a 1 percent levy on “vacant or underused housing” owned by non-resident, non-Canadians. Tax forms were originally due on Oct. 31. A Canadian lawmaker recently called for a suspension of tax collection until a cost-benefit analysis of the tax is released, citing concerns about the financial burden the tax places on Americans who own homes in Canada.
Speaking of “underused” housing… Proposed Colorado legislation would quadruple the property taxes owed on tens of thousands of short-term rental homes. Owners who rent their homes for more than 90 days per year on a short-term basis would pay the same property tax rate paid by commercial lodging properties, 27.9 percent, compared to the residential rate of 6.765 percent. The measure is endorsed by Democratic Gov. Jared Polis but faces significant popular opposition.
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