David Kamin

THREAD:

GOP Senators say they're trying to scale back the SALT cap relief in the House bill. But could the approach to SALT in the Senate bill actually end up *more* generous & costly overall than the House bill? Do Senators – or does anyone – even know, despite the intense political focus on SALT?

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Foreign tax provision in Trump budget bill spooks Wall Street Legislation would erode the appeal of US financial assets, warn banks and investors

THREAD

Markets are waking up to a provision buried in the House bill that could undermine the demand for US Treasuries at a time when bond markets are already jittery:

www.ft.com/content/b400...

www.bloomberg.com/news/article...

House bill would end many clean energy credits and add unworkable rules to others The major tax legislation currently moving through the House of Representatives makes deep cuts to tax provisions supporting the deployment of clean energy technologies through early terminations and ...

(4) And on the clean energy credits, the details on the severe cuts and unworkable restrictions: taxlawcenter.org/blog/house-b...

(3) While SALT cap shouldn't be used to finance this regressive / unfair bill and instead for other purposes, that's the right thing for this policy. This reading is clear in the text but contrary to public reporting / others initial reading. They should stick w/ this version.

Ways and Means Bill Curtails SALT Cap Workarounds for All Passthrough Entities The tax legislation that is currently moving through the House of Representatives would make substantial changes to the SALT cap. One of these changes is that the bill’s proposed text appears to fully...

(2) On SALT cap, the text of legislation -- contrary to our initial reading -- clearly limits SALT workarounds (which are unfair and expensive) for all biz including 199A biz. taxlawcenter.org/blog/ways-an...

More from @taxlawcenter.org on House reconciliation bill. (1) Close reading of bill shows text curtails SALT cap workarounds for all biz (including 199A biz). That’s good news IF it sticks. (2) OTOH, bill slashes clean energy credits and imposes unworkable red tape. Bad news.

(7) And even as the IRS is radically cut making it even harder to administer any such misguided EITC precertification program even as higher income Americans escape from audit when it comes to complex tax planning. end/

(6) This is about making it harder for lower-income working families to get access to one of the key supports – even while those with higher incomes face no such barriers, whether it be in cutting their rate by 23% for biz income or claiming other tax expenditures.

(5) We can have a serious and worthwhile discussion about how to improve compliance up and down the income spectrum. But, between radical cuts to the IRS and gameable / hard to enforce new provisions in this bill, this isn’t about compliance.

(4) The contrast between an expanded special deduction for biz income disproportionately for highest income + no tax on tips / overtime to the new, burdensome precertification system for working families getting the EITC is particularly stark.

Ways and Means Bill Would Cut Earned Income Tax Credit by Increasing Bureaucratic Burdens for Families This post explains how the bill would impose onerous burdens on taxpayers claiming the Earned Income Tax Credit (EITC) for tens of millions of eligible children and, in doing so, discourage many of th...

(3) On the onerous EITC precertification: taxlawcenter.org/blog/ways-an...

The House Ways and Means Tax Bill Encourages Tax “Gaming,” Adds Complexity, and Increases Filing Burdens on Low- and Middle-Income Families and Workers This post explores the bill's troublingly haphazard approach to tax breaks that would create new opportunities for tax avoidance and evasion, add complexity to the tax system, and increase filing burd...

(2) On unfair and complex new provisions: taxlawcenter.org/blog/the-hou...

(1) Two new pieces from @taxlawcenter.org on tax provisions in the House reconciliation bill. Detailing unfair and complex new provisions to the benefit of those with higher incomes and then onerous provisions on lower-income working families.

The House Ways and Means Tax Bill Encourages Tax “Gaming,” Adds Complexity, and Increases Filing Burdens on Low- and Middle-Income Families and Workers This post explores the bill's troublingly haphazard approach to tax breaks that would create new opportunities for tax avoidance and evasion, add complexity to the tax system, and increase filing burd...

Ways & Means bill takes "haphazard approach to tax breaks, would create new opportunities for tax avoidance & evasion, add complexity to the tax system, & increase filing burdens for low- & moderate-income families and workers"

New @taxlawcenter.org post: taxlawcenter.org/blog/the-hou...

THREAD: the Ways & Means bill creates new opportunities for tax avoidance and evasion, adds complexity to the tax system, and increases filing burdens for low- & moderate-income families.

My @taxlawcenter.org colleagues have more analysis coming, but here's a starter list (suggestions welcome):

(12) There’s much more to be said (and much more reading to do) and @taxlawcenter.org will have more to say as we do.... end/

(11) Now, it’s much more of a Frankenstein when it comes to the tax base. Some of those elements remain but even more mixed with unfair / complex / expanded giveaways -- all the while losing trillions in regressive fashion.

(10) The draft stands in contrast to some of the philosophy 2017, with the notable exception of 199A. That bill lost trillions. But, had a number of real base broadeners / simplifications. Like limiting mortgage interest deduction. Swapping itemized for standard deduction.

(9) And, there are large cutbacks in tax credits for clean energy. That brings me to the fact that it’s not about having a “pure” base. It’s about treating fairly and using limited resources to benefit those who need it and encourage activities we should have (like clean energy).

(8) And there's effectively a 35 percent cap on the value of itemized deductions. That's a good move--actually building off Biden / Obama. So, for that, but not to pay for even more regressive and complex tax cuts.

(7) There are some revenue raisers too. There’s the SALT cap. But, loosened to regressive effect. And endorsing the SALT workaround for pass throughs so long as they’re eligible biz under Section 199A. So, here too, architects (and others eligible) are great! Doctors are not!

Tip of the iceberg? How tax-free tips could sink the tax system By: Mike Kaercher and Chye-Ching Huang

(6) Should there be some de minimis for cash tips or other simplifying system, maybe? But, anything involving broad exclusions like these will be regressive and hard to administer. For more: medium.com/@taxlawcente...

(5) Unlike 199A, these aren’t about super high income. But, higher-income workers can still get it since eligibility goes up to someone making $160,000 / yr. And those in higher brackets will get the most – well, if they are “winners” and get cash tips or overtime.

(4) Then there’s the tips and overtime. We knew these were coming from the campaign, but, still, to have new provisions which entirely exclude this kind of income from the tax system is…well…not good.

Ways and Means proposes making costly 199A “pass-through” deduction more generous and valuable to high-income earners The proposal takes an inefficient, inequitable, and costly policy, and makes it more generous and more valuable to higher-income people, especially those in certain industries including lawyers and lo...

(3) And, it expands Section 199A in another way as well, most importantly bringing in certain investment funds, almost surely with high-income investors. More details here from the @taxlawcenter.org: taxlawcenter.org/blog/ways-an...

(2) Let’s start off with the original sin of the 2017 law, Section 199A. Allowing people in certain sectors (but never employees because employees aren’t winners!)—and including some of those with the highest income—to cut their tax rate by 20%. Now, 23%. Going in wrong direction.

(1) There’s a lot in W+Ms draft bill. We knew it'd be losing trillions of $$$ and in regressive fashion. But provisions also pick winners+losers often in unjustified ways and give us an (even more) swiss cheese tax system that’d generally be harder to administer and unfair in new ways.

A letter from many of the @nyulaw.bsky.social faculty on importance of academic freedom and rule of law, which are under threat. We have many different perspectives and should on law and policy, but these are core principles in support of which we stand together. drive.google.com/file/d/1yysJ...

NYU Law Forum | The DOGE Era: Impoundment, Data Privacy, and the Administrative State Join the NYU Law Forum for a conversation about DOGE and the administrative state, including impoundment and data privacy issues. The conversation will feature Former Treasury Deputy Secretary Wally A...

On 4/9, join us for a conversation about DOGE & the administrative state, featuring former Treasury Deputy Secretary Wally Adeyemo and Tax Law Center experts including former OMB Director Shalanda Young and professors @lilybatch.bsky.social & @davidkamin.bsky.social
taxlawcenter.org/events/nyu-l...