Category:

tax

Treasury’s Proposal Aimed at Limiting Tax Evasion by The Wealthy, May End Up Harming Everyone Else

In May of 2021, the United States Department of Treasury (“Treasury”) introduced its revenue proposals for the 2022 fiscal year. One of the proposals that garnered significant attention was the Comprehensive Financial Account Reporting to Improve Tax Compliance; under this proposal, financial institutions will be required to report to the Treasury the total amount of inflow and outflow on bank, loan, and investment accounts for accounts that hold at least $600 a year. Since its introduction and after serious political push-back, this amount has since been increased to accounts that hold at least $10,000 a year.

If the reporting requirement is implemented, the Biden Administration proposes to raise the Internal Revenue Service (“IRS”) funding by $80 billion to finance the cost of additional auditors and equipment. However, the Biden Administration, with the proposal’s implementation, expects a payoff of $460 billion over ten years in additional revenue. Although this proposal is intended at limiting wealth tax evasion, this proposal misses the mark. Specifically, it does not adequately address businesses that are able to cheat tax codes by stretching the current law, and instead scrutinizes small businesses and individuals while it exponentially increases the personal data held by the Treasury.

Should the United States Government Continue Subsidizing the Fossil Fuel Industry?

In his proposed American Jobs Plan, President Biden has stated that if the United States wants to achieve its decarbonization targets and get climate change under control, cutting off government support to the fossil fuel industry is a crucial first step. Eliminating government subsidies for fossil fuels is the most logical step in fighting back against climate change, but Biden is facing an uphill battle to get his American Jobs Plan passed through Congress.

Reining in Tax Havens

Shortly after Bristol Myers Squibb filed to create an offshore subsidiary in Ireland, the IRS took notice. The large drug manufacturer’s actions would now allow them to attribute some of its patent rights and medications to the subsidiary, and therefore subject to a twelve and a half percent Irish corporate tax rate, which is far less than the current twenty one percent rate in the United States. Additionally, while Bristol Myers had maximized the write offs and deductions for their products in the United States, the Irish deductions would now offset the U.S. taxes.

Crypto Confusion Leads to Legislative Action: Multiple Bills Introduced to Clarify Federal Regulation of Cryptocurrencies

Cryptocurrencies have often been associated with illegal activities due to the fact that they allow users to remain relatively anonymous. This anonymity is possible because, when transacting with Bitcoin and other cryptocurrencies, you can see where funds are being sent but not who sent or received them. However, there are signs that the use of crypto for unlawful purposes may be falling with illicit activity accounting for just 0.34% of all crypto transactions last year – down from roughly 2% a year earlier. Despite this improvement, cryptocurrency regulation appears to remain a top priority for federal lawmakers. One such example of this is the proposal of an anti-money laundering rule which would require people who hold their cryptocurrency in a private digital wallet to undergo identity checks if they make transactions of $3,000 or more. But Congress does not appear to be stopping there. As cryptocurrencies surged in value in recent days, lawmakers jumped to introduce two new bills aimed at advancing regulation of these precarious digital assets.

The Problem With Financial Transaction Taxes: When It Pays to Leave, Instead of Comply

Chicago has a number of nicknames and “Derivatives Capital of the World” is one of them, as the city is home to CME Group and CBOE, two major U.S. exchange operators. The city risked this title in 2020 with the push for the LaSalle Street Tax, a financial transaction tax (“FTT”) that would impose a tax on trades made by Chicago exchanges. This tax was an attempt to fill the city’s billion dollar 2021 budget shortfall, but failed in large part because the evolution of trading has made these operators incredibly mobile. In a Chicago City Council meeting, Terry Duffy, CEO of CME Group, made it clear the imposition of the LaSalle Street Tax wouldn’t result in more revenue for the city, but a great deal of empty office space instead. For now, the LaSalle Street Tax is off the table in Chicago, but other governments, like New Jersey, are considering similar taxes. States considering FTTs ought to look at the pushback in Chicago and understand that mobility is the inevitable defense to such a tax.

The Cash Crop King: How U.S. Federalism Makes It Difficult to Insure the World’s Most Lucrative Crop

On June 25, 2019, Governor Pritzker signed the Illinois Cannabis Regulation and Tax Act, legalizing cannabis for adult use in Illinois. Cannabis is the most lucrative crop globally and the cash-making abilities of cannabis have been proven true in Illinois. Sales in the state exceeded $1 billion in the first full year of legalization, resulting in a $205.4 million tax windfall for Illinois. This success, however, is no small feat for cannabis companies considering the banking and insurance obstacles they must overcome to start this type of business. Federalism is at the heart of many of these hurdles. 

COVID-19’s Gender Impact

As March starts and we enter Women’s History Month, Time Magazine, The New York Times, National Public Radio, CNBC, The Washington Post, and more wrote articles on the unique and disproportionate effects that COVID-19 has had on women. However, by focusing exclusively on the effect of COVID-19 on women, we ignore the impacts faced by gender non-binary people. This approach leaves many people to continue to be disproportionately impacted by the pandemic, as economic impacts cannot be addressed and answered, if they are not first acknowledged.

The United States’ current systems and its response to COVID-19 has failed to serve many people, in fact, the pandemic has amplified existing economic and social inequalities. If we are to resolve these inequalities, instead of focusing on the disproportionate effects experienced by cis-gender women, the focus should shift towards marginalized people, such as, cis and transgender women, and non-binary individuals. This article takes a limited approach due to its length, and it focuses on the effects COVID-19 has had on women, and the transgender and non-binary community, where the United States needs to acknowledge the economic inequalities these people face and change the current systems. 

State Governments Make Statement that Masks are Essential by Exempting them from Sales Tax

The coronavirus is still rampant in our country rendering an average of 96,275 new cases per day, and legislatures are attempting to stop the spread by any means necessary. One of the most recent innovative ideas by some state lawmakers is to emphasize the use of wearing masks by eliminating the sales tax on the purchase of Personal Protective Equipment (PPE).

What is “Vote ‘Yes’ for Fairness” and why is it all over my T.V.?

If you live in Illinois, you have likely seen in the past couple of days this vibrant blue commercial at least once or twice. The commercial encourages Illinois voters to “Vote Yes for Fairness” at the polls this November by voting their approval of an amendment to the 1970 Illinois Constitution. The proposed amendment would change the state’s current state income system from a flat tax to a graduated income tax. Illinois Governor J.B. Pritzker made the adoption of a progressive income tax a centerpiece of his policy agenda in a budget address back in February 2019, and it was geared up to be a focus of election-season debates before the COVID-19 pandemic took precedence. With the Illinois general election less than fifty days away, however, the ‘Vote Yes for Fairness’ campaign has bolstered its attempts at garnering voters’ approval of the proposed amendment.

Tax Compliance During the Partial Government Shutdown

On December 22, 2018, for the third time in a year, the United States government shut down. Almost two years into his presidency, President Trump, feeling pressure to accomplish one of his many promises from the campaign trail, requested $5.7 billionfrom Congress to fund his proposed wall at the border of the United States and Mexico. Following negotiation efforts by Senate Democrats, the standoff between the President and the Senate ended in a financial default, triggering a partial shutdown. The shutdown became the longest in U.S. history on January 19, 2019, beating the previous 21-day recordset by the 1995-1996 shutdown. The shutdown left an estimated 380,000 government employeeslocked out of work without pay and an even greater 420,000 employees working for no compensation at all, including employees of the IRS. With one of the United States’ most important governmental bodies being almost completely stalled by a lapse in funding, it begs the question: what happens to taxes during a shutdown?