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Play Episode Listen Later May 14, 2025 33:32

Behind every piece of major legislation, there's a story of strategy, sacrifice, and high stakes. In this episode of American Potential, host David From is joined by Andy Koenig—former White House advisor and one of the key architects behind the 2017 Tax Cuts and Jobs Act (TCJA). From inside the halls of the West Wing to late-night meetings on Capitol Hill, Andy offers a behind-the-scenes look at how the landmark tax reform came together—and why it matters more than ever today. Far from being just a “corporate tax cut,” the TCJA helped over 25 million small businesses and countless working families keep more of their hard-earned money. Andy breaks down how the law simplified the code, sparked job growth, and put power back in the hands of entrepreneurs—not bureaucrats. But with key provisions set to expire soon, Americans now face the threat of a massive tax hike at the worst possible time. Andy also shares a lighter moment from the White House: President Trump wanted to name the bill “Cut Cut Cut”—a reminder that clear messaging matters. With inflation surging and government spending out of control, Andy and David make the case for why now is the time to make these tax cuts permanent—and why letting them lapse would be a crushing blow to American potential. Whether you're a taxpayer, small business owner, or policy nerd, this episode is a must-listen for understanding the stakes behind one of the most consequential economic reforms in a generation.

What the Tax Debate Could Mean for Markets

WPRV- Don Sowa's MoneyTalk

Play Episode Listen Later May 14, 2025 10:18

Our strategists Michael Zezas and Ariana Salvatore provide context around U.S. House Republicans' proposed tax bill and how investors should view its potential market impact.Read more insights from Morgan Stanley.----- Transcript -----Michael Zezas: Welcome to Thoughts on the Market. I'm Michael Zezas, Global Head of Fixed Income Research and Public Policy Strategy.Ariana Salvatore: And I'm Ariana Salvatore, Public Policy Strategist.Michael Zezas: Today, we'll dig into Congress's deliberations on taxes and fiscal spending.It's Wednesday, May 14th at 10am in New York.Michael Zezas: So, Ariana, there's been a lot of news around the tax and spending plans that Congress is pursuing; this fiscal package – and clients are really, really focused on it. You're having a lot of those conversations right now. Why are clients so focused on all of this?Ariana Salvatore: So, clients have reasons to focus on this tax policy bill across equities, fixed income, and for macroeconomic impacts.Starting with equities, there's a lot of the 2017 tax cut bill that's coming up for expiration towards the end of this year. So, this bill is Congress's chance to extend the expiring TCJA. And add on some incremental tax cuts that President Trump floated on the campaign trail. So, there's some really important sector impacts on the specific legislation side. And then as far as the deficit goes, that matters a lot for the economic ramifications next year and for bond yields.But Mike, to pivot this back to you, where do you think investor expectations are for the outcome of this package?Michael Zezas: So there's a lot of moving pieces in this fiscal policy package, and I think what's happening here is that investors can project a lot onto this. They can project a lot of positivity and constructive outcomes for markets; and a lot of negativity and negative outcomes for markets.So, for example, if you are really focused on the deficit impact of cutting taxes and whether or not there's enough spending cuts to offset those tax extensions, then you could look at the array of possible outcomes here and expect a major deficit expansion. And that might make you less constructive on bonds because you would expect yields to go higher as there was greater supply of Treasuries needed to borrow that much to finance the tax cuts. Again, not necessarily fully offset by spending cuts.So, you could look at this and say, well, this will ultimately be something where economic growth helps tax revenues. And you might be looking at the benefits for companies and the feed through to the equity markets and think really positively about it.And we think the truth is probably somewhere in between. You're not going to get policy that really justifies either your highest hopes or your greatest fears here.Ariana Salvatore: So, it's really like a Rorschach test for investors. When we think about our base case, how do you think that's going to materialize? What on the policy front are we watching for?Michael Zezas: Yeah, so we have to consider the starting point here, which is Congress is trying to address a series of tax cuts that are set to expire at the end of the year. And if they extend all of those tax cuts, then on a year-over-year basis, you didn't really change any policy. So that just on its own might not mean a meaningful deficit increase.Now, if Congress is able to extend greater tax cuts on top of that; but it's going to offset those greater tax cuts with spending cuts in revenue raises elsewhere, then again you might end up with a net effect close to zero on a deficit basis.And the way our economists look at this mix is that you might end up with an effect from a stimulus perspective on the economy that's something close to neutral as well. So, there's a lot of policy changes happening beneath the surface. But in the aggregate, it might not mean a heck of a lot for the economic outlook for next year.Now, that doesn't mean that there would be zero deficit increase in the aggregate next year because this is just one policy that is part of a larger set of government policies that make up the total spending posture of the government. There's already something in the range of $200-250 billion of deficit increase that was already going to happen next year. Because of weaker revenue growth on slower economic growth this year, and some spending that would automatically have happened because of inflation cost adjustments and higher interest on the debt. So, long story short, the policy that's happening right now that we think is going to be the endpoint for congressional deliberations isn't something our economists see as meaningfully uplifting growth for next year, and it probably increases the deficit – at least somewhat next year.Now we're thinking very short term here about what happens in 2026. But I think investors need to think around that timeline because if you're thinking about what this means for getting deficits smaller, multiple years ahead, or creating the type of tax environment that might induce greater corporate investment and greater economic growth years ahead – all those things are possible. But they're very hypothetical and they're subject to policy changes that could happen after the next Congress comes in or the next president comes in.So, Ariana, that's the overall look at our base case. But I think it's important to understand here that there are multiple different paths this legislation could follow. Can you explain what are some of the sticking points? And, depending on how they're resolved, how that might change the trajectory of what's ultimately passed here?Ariana Salvatore: There are a number of disagreements that need to be resolved. In particular, one of the biggest that we're focused on is on the SALT cap; so that's the cap on State And Local Tax deductions that individuals can take. That raised about a trillion dollars of revenue in the first iteration of the Tax Cuts and Jobs Act in 2017.Republicans generally are okay with making a modification to that cap, maybe taking it a bit higher, or imposing some income thresholds. But the SALT caucus, this small group of Republicans in Congress, they're pushing for a full repeal or something bigger than just a small dollar amount increase.There's also a group of moderate Republicans pushing against any sort of spending cuts to programs like Medicaid and SNAP; that's the food stamps program. And then there's another cohort of House Republicans that are seeking to preserve the Inflation Reduction Act. Ultimately, these are all going to be continuous tension points. They're going to have to settle on some pay fors, some savings, and we think where that lands is effectively at a $90 billion or so deficit increase from just the tax policy changes next year.Now with tariff revenue excluded, that's probably closer to [$]130 billion. But Mike, to your point, there are these scheduled increases in outlays that also are going to have to be considered for next year's deficit. So, you're looking at an overall increase of about $310 billion.Michael Zezas: Yeah, I think that's right and the different ways those different dynamics could play out, I think puts us in a range of a $200 billion expansion maybe on the low end, and a $400 billion expansion on the high end. And these are meaningful numbers. But I think important context for investors is that these numbers might seem a lot smaller than some of what's been reported in the press, and that's because the press reports on the congressional budget office scoring, and these are typically 10-year numbers.So, you would multiply that one-year number by 10 at least conceptually. And these are numbers relative to a reality in which the tax cuts were allowed to expire. So, it's basically counting up revenue that is being missed by not allowing the tax cuts to expire. So, the context matters a lot here. And so we have been encouraging investors to really kind of look through the headlines, really kind of break down the context and really kind of focus on the short term impacts because those are the most reliable impacts and the ones to really anchor to; because policy uncertainty beyond a year is substantially higher than even the very high policy uncertainty we're experiencing right now.So, sticking with the theme of uncertainty, let's talk timing here. Like we came into the year thinking this tax bill would be resolved late in the year. Is that still the case or are you thinking it might be a bit sooner?Ariana Salvatore: I think that timing still holds up. Right now, the reconciliation bill is supposed to address the expiring debt ceiling. So, the real deadline for getting the bill done is the X date or the date by which the extraordinary measures are projected to be exhausted. That's the date that we would potentially hit an actual default.Of course, that date is somewhat of a moving target. It's highly dependent on tax receipts from Treasury. But our estimate is that it's somewhere around August or September. In the meantime, there's a number of key catalysts that we're watching; namely, I would say, other projections of the X date coming from Treasury, as well as some of these markups when we start to get more bill text and hear about how some of the disputes are being resolved.As I mentioned, we had text earlier this week, but there's still no quote fix for the SALT cap, and the house is still tentatively pushing for its Memorial Day deadline. That's just six legislative days away.Michael Zezas: Got it. So, I think then that means that we're starting to learn a lot more about how this bill comes together. We will be learning even a lot more over the next few months and while we set out our expectations that you're going to have some fiscal policy expansion. But largely a broadly unchanged posture for U.S. fiscal policy. We're going to have to keep checking those regularly as we get new bits of information coming out of Congress on probably a daily basis at this point.Ariana Salvatore: That's right.Michael Zezas: Great. Well, Ariana, thanks for taking the time to talk.Ariana Salvatore: Great speaking with you, Michael.Michael Zezas: Thank you for your time. If you find Thoughts on the Market and the topics we cover of interest, leave us a review wherever you listen. And if you like what you hear, tell a friend or colleague about us today.

Setting Your Financial Priorities

Play Episode Listen Later May 14, 2025 41:26

As a young family with a lifetime of major expenses ahead of you, it can be hard to know where your savings should go. Donna offers guidance on how to use your resources to put you in the best position to achieving both your early and late stage financial goals. Also on MoneyTalk, planning a Roth conversion around the sunsetting of the TCJA, and how to handle inherited retirement accounts. Host: Donna Sowa Allard, CFP®, AIF®; Air Date: 5/12/2025. Have a question for the hosts? Visit sowafinancial.com/moneytalk to join the conversation!See omnystudio.com/listener for privacy information.

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America's Roundtable with Governor Phil Bryant | The First 100 Days of President Donald Trump's Second Administration

Play Episode Listen Later Apr 21, 2025 46:44

Follow us on X: @PhilBryantMS @americasrt1776 @ileaderssummit @NatashaSrdoc @JoelAnandUSA @supertalk Join America's Roundtable (https://americasrt.com/) radio co-hosts Natasha Srdoc and Joel Anand Samy with Governor Phil Bryant, the State of Mississippi's 64th governor, former lieutenant governor, state auditor, legislator in the Mississippi House of Representatives and chairman of the Southern States Energy Board. Phil Bryant is a founding member of BSS Global where he provides strategic advice and business development services to some of the world's largest industry leaders. He serves on the executive advisory board of International Leaders Summit. America's Roundtable conversation with Governor Bryant brings to the forefront key policy issues including trade and tariffs, the urgency to advance tax reform, unleash energy independence and protect America's sovereignty. The timely discussion is focused on President Trump's policies and executive orders — and what it means for America's citizens, taxpayers, local communities and states. Further reading: Magnolia Tribune | Vice President Vance touts ‘Mississippi Miracle,' calls the education reform “pretty incredible” (https://magnoliatribune.com/2025/04/08/vice-president-vance-touts-mississippi-miracle-calls-the-education-reform-pretty-incredible/) Brief excerpt from the article: “This is pretty incredible,” Vice President Vance wrote on X. “Smart education reform drastically improved Mississippi's schools.” The reforms began in 2012 under then-Governor Phil Bryant (R), Lt. Governor Tate Reeves (R) and Speaker Philip Gunn (R). As previously noted by Laurie Todd-Smith in a 2023 Magnolia Tribune column on the making of the “Mississippi Miracle,” only 33 percent of third graders and 32 percent of 8th graders were reading proficiently on state tests that year. She led the governor's education policy team and is now the Assistant Secretary for Early Childhood Education at the U.S. Department of Health and Human Services. Bryant presented lawmakers with an education vision titled “Framing Mississippi's Future” and in 2013, reforms such as the Literacy Based Promotion Act (3rd Grade Reading Gate), the Pre-K Collaborative, the Mississippi Charter School Act, Dyslexia Education Scholarships, and more were passed and signed into law. Mississippi unites with Israel at Jerusalem Leaders Summit (https://www.jns.org/mississippi-unites-with-israel-at-jerusalem-leaders-summit/) Jerusalem | Mississippi Gov. Phil Bryant bounded on stage and, in his obvious Southern drawl, greeted the guests of the Jerusalem Leaders Summit, which took place last month at the Inbal hotel. Bryant was presented with the Distinguished Leadership Award for his efforts to strengthen the Israel-U.S. strategic partnership. He is a strong Israel advocate and his emotions were on full display when he addressed the crowd. “We have so many friends around the world,” he said, “but none as close, and none that I love more than Israel. I am called to be here. Perhaps sometimes we cannot explain exactly why, but that call, that voice, is stronger than any other that we hear, to come to Israel, to Jerusalem, to do what I can to strengthen this relationship.” The Third Jerusalem Leaders Summit held from Nov. 18-20, proved a unique event featuring leading voices who articulated principled solutions in addressing the 21st-century's economic concerns, global threats and security challenges. The parent organization—the International Leaders Summit, co-founded by Joel Anand Samy and Natasha Srdoc—brought together leaders from America, Britain, continental Europe, India and Israel to its inaugural Jerusalem Leaders Summit event in 2015, affirming the rule of law of civilization, based on shared principles and values. americasrt.com (https://americasrt.com/) https://summitleadersusa.com/ | https://jerusalemleaderssummit.com/ America's Roundtable on Apple Podcasts: https://podcasts.apple.com/us/podcast/americas-roundtable/id1518878472 X: @PhilBryantMS @americasrt1776 @ileaderssummit @NatashaSrdoc @JoelAnandUSA @supertalk America's Roundtable is co-hosted by Natasha Srdoc and Joel Anand Samy, co-founders of International Leaders Summit and the Jerusalem Leaders Summit. America's Roundtable (https://americasrt.com/) radio program - a strategic initiative of International Leaders Summit, focuses on America's economy, healthcare reform, rule of law, security and trade, and its strategic partnership with rule of law nations around the world. The radio program features high-ranking US administration officials, cabinet members, members of Congress, state government officials, distinguished diplomats, business and media leaders and influential thinkers from around the world. Tune into America's Roundtable Radio program from Washington, DC via live streaming on Saturday mornings via 65 radio stations at 7:30 A.M. (ET) on Lanser Broadcasting Corporation covering the Michigan and the Midwest market, and at 7:30 A.M. (CT) on SuperTalk Mississippi — SuperTalk.FM reaching listeners in every county within the State of Mississippi, and neighboring states in the South including Alabama, Arkansas, Louisiana and Tennessee. Listen to America's Roundtable on digital platforms including Apple Podcasts, Spotify, Amazon, Google and other key online platforms. Listen live, Saturdays at 7:30 A.M. (CT) on SuperTalk | https://www.supertalk.fm

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Paperwork, Politics, and $30K Lost: One Business Owner's Fight for Freedom

america freedom politics joe biden congress louisiana business owners american dream main street baton rouge tax cuts atf paperwork lost one tcja jobs act tcja

Play Episode Listen Later Apr 18, 2025 22:49

What happens when a family business is nearly shut down over a simple paperwork error? In this eye-opening episode of American Potential, host David From sits down with Chase Sharp, a third-generation business owner from Baton Rouge, Louisiana, who shares how the federal government nearly wiped out his company—not because of fraud or abuse, but because of a minor administrative mistake. Chase walks us through how the Biden administration's “zero tolerance” gun policy triggered an aggressive ATF response that led to a year-and-a-half court battle, $30,000 in legal fees, and untold hours diverted from actually serving customers. He explains how this level of federal overreach isn't just bureaucratic—it's personal, and it's threatening the future of Main Street businesses across America. But it's not all bad news. Chase also reflects on the positive impact of the Tax Cuts and Jobs Act (TCJA), which helped his family-owned pawn shop expand to five locations, give raises to employees, and serve more customers during a period of historic economic growth. Now, with TCJA set to expire, he warns what's at stake for business owners and working families if Congress doesn't act. From navigating audits and red tape to surviving targeted regulation and building a legacy with his family, Chase's story is a powerful reminder of why economic freedom matters—and how it's under threat. If you care about protecting small businesses, keeping the American Dream alive, and making government work for the people—not against them—this is an episode you won't want to miss.

Senate's Budget Policy Change Sparks Debate

America in Focus

Play Episode Listen Later Apr 12, 2025 7:03

(The Center Square) – As Senate Republicans work on the floor to pass a compromise budget resolution, fiscal watchdogs are warning that permanently extending President Donald Trump's tax cuts will have dire consequences. The Senate's amendment to the House's $4.5 trillion budget resolution would theoretically subtract $3.8 trillion from the price tag by adopting a current policy baseline, which treats renewing the 2017 Tax Cuts and Jobs Act as a continuation of current law rather than new policy. The unconventional tactic would also allow the TCJA to become permanent since it puts the costs of extension at zero. Support this podcast: https://secure.anedot.com/franklin-news-foundation/ce052532-b1e4-41c4-945c-d7ce2f52c38a?source_code=xxxxxxFull story: https://www.thecentersquare.com/national/article_501c956b-b50d-4fe9-8972-1b1f8d3a7f14.html

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The Valley Current®: What is Tax Treatment of Cybercrime Financial Losses (aka "SCAMS")?

THE VALLEY CURRENT®️ COMPUTERLAW GROUP LLP

Play Episode Listen Later Apr 9, 2025 19:57

In this episode of The Valley Current®, host Jack Russo and CPA Steve Rabin dive into the tax challenges surrounding financial scams. With IRS staffing cuts, shifting audit risks, and the post-TCJA loss deduction rules, victims of scams may find themselves with fewer tax remedies—unless a business is involved. Jack and Steve unpack scenarios from wire fraud to crypto wallet losses, highlight key distinctions in personal vs. business tax treatment, and stress the need for sound professional advice. Tune in for a timely, sharp-witted discussion filled with real-world examples and tax-saving tips for a complex season. https://www.washingtonpost.com/business/2025/03/22/irs-tax-revenue-loss-federal-budget/ Jack Russo Managing Partner Jrusso@computerlaw.com www.computerlaw.com https://www.linkedin.com/in/jackrusso "Every Entrepreneur Imagines a Better World"®️

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Art Werner: How Donor-Advised Funds Empower Strategic Giving | Quick Tax Tip

CPA Trendlines Podcasts

Play Episode Listen Later Apr 9, 2025 3:18

Unlock the full value of charitable contributions with one of the tax code's most underused tools.Quick Tax TipWith Art WernerCPE TodayWhat if you could give more, support your favorite causes for years to come, and still walk away with a sizable tax deduction—all in one smart move?Click here for more Art WernerThat's the opportunity donor-advised funds (DAFs) present, and the latest Quick Tax Tip brings clarity to a concept many donors and advisors overlook.“A donor-advised fund, by itself, is a charity,” Werner explains. “But the contribution we make to it is deductible within IRS limits—and what's really nice is you can lump your giving up front and spread it out over time.”For donors who no longer itemize due to the increased standard deduction post-TCJA, this opens the door to reclaiming lost tax benefits. Instead of giving $5,000 a year and missing out on deductions, you could contribute $50,000 in one year to a DAF—claim your deduction—then direct that money to charities over a decade.

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April Fool's: Beliefs That Fool Retirement Savers The Most

Plan With The Tax Man

Play Episode Listen Later Mar 27, 2025 16:08

April Fool's Day is all about jokes and pranks, but when it comes to retirement planning, getting fooled can cost you real money. Today, we're uncovering the beliefs that fool retirees and pre-retirees into making bad financial moves. Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381 ----more---- Transcript: Speaker 1: It's time once again for another edition of Plan With The Tax Man. And April Fool's Day is around us, all about the jokes and the pranks, but when it comes to retirement strategies, we want to make sure we don't get fooled in a way that can cost us any real money. So let's talk about that this week here on the show. What's going on everybody? Welcome into the podcast. This is Plan With The Tax Man, with Tony Mauro from Tax Doctor Inc. Serving folks all around the Iowa area. If you've got some questions, some concerns, need some help, please check him out and go talk with a qualified professional like Tony online. You can get some time on this calendar@yourplanningpros.com. That's yourplanningpros.com, or you can call him at 844-707-7381. We'll have information of the podcast if you'd like to click on those as well. Tony's got 30 years of experience helping people get to and through retirement, and a great resource for you to tap into. So, Tony, it is April Fool's Day-ish at the time we're dropping this. I think we're dropping this like maybe a few days beforehand, but are you a big prankster? Tony Mauro: I'm a huge prankster. Speaker 1: Are you? Tony Mauro: It's my second favorite holiday, yeah. Speaker 1: Oh, okay. All right. So does your wife get tired of it? Tony Mauro: My wife gets tired of it, my son, my dad, everybody. Speaker 1: Okay. Tony Mauro: But they play them on me too, so yeah, we have a lot of fun with April Fools. Speaker 1: Good. That's good. Yeah, my dad was pretty bad about it when he was with us. He was always pulling something on his family members, so it was like, all right, now you had to be on guard whenever it rolled around. Tony Mauro: Absolutely. Speaker 1: You knew he was up to something. But let's talk about a few categories here from a financial standpoint where we don't want to get fooled, Tony. We want to make sure, and look, it's super easy right now. Right. I mean, between the news headlines, social media, the polarization of people, whether you're left or right, you like the administration, you don't like the administration. Everybody's got an opinion every six seconds of the day. Right. And so it's very, very easy to see a bunch of stuff that maybe kind of gets you all worked up. Right. So we want to make sure that we're not just stepping in something just because we're having a visceral reaction to some sort of media bombardment or whatever. So let's start with the high returns since obviously right now, Tony, we had a choppy March, right? So the markets were choppy. I think it's easy when we find it, we all love it when it's high, right? So we all love the market when it's doing well, and we've had a pretty good market for, let's be honest, we haven't really had a prolonged downturn, right? Since 08, 09. If you think about it, we're closing in on 20 years since we've had a sustained prolonged downturn. Now we've had blips, we've had the COVID downturn, and we had different things. 22 was rough for a little bit as well, but it's not been sustained more than a couple of months, right? So I think people that are kind of get lulled into the, Hey, the market's beating you up, let's get you into this product that's got guaranteed high returns. Be careful of that, right? Make sure you're really doing your diligence and reading the fine print. Tony Mauro: Yeah, you do have to have that, because it is, and I always know when maybe the markets are possibly too high, when everybody, especially people that are just tax clients, aren't wealth management clients are saying, "What do you think about this stock? What do you think about that stock?" Speaker 1: Right. Tony Mauro: And,- Speaker 1: Or should I get into an annuity or whatever? Tony Mauro: Yeah. Speaker 1: Yeah. Tony Mauro: All that kind of stuff, because they think that because where we've been for the last 20 or so years, returns are easy and there's some foolishness to that, I would say. Speaker 1: Some fool, yeah, fool's goal, I think that's a good way. Yeah. Tony Mauro: Because you got to look at it this way. High returns do come with volatility and some risk. And so whether it's in a stock or you're locking yourself up in an annuity, which is a whole different type of product, then you certainly got to understand what those risks are and have that explained to you. And if that's not your appetite for obtaining that return, which we always work off, we're trying to get you the best return based on how you want to get to point B, so to speak, with the least amount of volatility and the least amount of potential tax consequences. Now that may not be, and even come close to say S&P 500 returns, but for you that might be good, but for somebody else,- Speaker 1: Good point. Tony Mauro: It might not be. Speaker 1: Yeah. Tony Mauro: But don't just say, well, I want the highest return out there because there's always something new. Nobody, in my opinion, can accurately predict what the market is going to do tomorrow in the short term. Now, a lot of them, obviously, it's pretty easy to say, well, over the long term, that the market's the place to be. Speaker 1: Oh, the market always comes back, right? I just saw this earlier today. We were just chatting about it, you and I, before we jumped on the podcast, and it was like, people are freaking out. "Oh, I'm losing my retirement because of this 10% correction we've had in March." And it's like, okay, first of all, and the immediate comment from someone is, "Well, don't worry. The market comes back." And they freak out and they go, "Well, I don't have time to wait for it to come back." Well, if you didn't have a strategy in place and you were planning on retiring and a 10% correction crippled you, then you weren't in good shape to begin with anyway. Tony Mauro: No. Speaker 1: Right. Tony Mauro: And you shouldn't have been in the market if you're ready to retire or you should,- Speaker 1: Not at 10%. Yeah. Yeah. Tony Mauro: Not there. So it is,- Speaker 1: Exactly. Tony Mauro: We constantly battle that with tempering and making people understand and get their whole plan in front of them, just so they're not so focused on what's going on today,- Speaker 1: Right. Right. Yep. Tony Mauro: In the news. Speaker 1: Yep. Which is the point of this podcast this week is, the April Fools, not that it's April Fools that they're pulling a prank, so to speak, but it's just kind of being fooled into things because of the constant bombardment of the media. You and I talked on the last podcast that in the course of the same day that we were chatting, the news cycle ran from the sky is falling earlier in the morning with the market to, oh, the outlook is looking pretty good because the inflation numbers came in and were down a half a point or a point. Tony Mauro: Yeah. Speaker 1: So they just run with whatever's going to get them eyeballs. So just make sure we're, I think we all know that, but whenever we start to panic a little bit, that's when that little devil on our shoulder kind of creeps up and taps us and says, Hey, be worried. So let's talk about the next one, which is the tax time bomb. Getting fooled into underestimating taxes on your account. And here's the angle I wanted to take on this, Tony. So again, regardless of what your political slant is, if you find yourself, and here's, let me set this up. It's going to take a second, folks, but I think it'll, hopefully it'll make sense. I'm one of those people, Tony, that my personal health and the family history says I'm going to probably pass away young, right, in my 70s. Now I could totally plan to liquidate and blow through all my money and have big fun and spend it all by 72 when I think I'm going to croak. But if I'm wrong, right, I'm going to be screwed. I'm going to be screwed, right, because I'm not going to have anything. Well, if you're right now, if you're all excited about the no tax on social security, no tax on tips or the conversation about abolishing the IRS or getting away with, great. Look, if that happens and they get rid, I think I'm sure we'll all be dancing in the street if they get rid of the IRS. However, if they don't, don't you think you should have a strategy for dealing with the tax time bomb that you're probably sitting on, right? And that's my point, right? If you've got a million dollars sitting in a 401K, don't just kind of like go fool's gold and think, Hey, Trump's going to eliminate all the taxes and Bob's your uncle and you're going to get to keep all that money. Be smart in the event that you still have to pay your RMDs or whatever. Tony Mauro: And I mean, you look back through all of history. Now, keep in mind what I tell people when they start talking like this is, tell me where you think that this, the biggest arm, the only arm almost for collecting the accounts receivable for the US government is, which is the IRS. They're going to go away. How do you think the government will function? Now, maybe they'll, like you said, maybe they'll come up with something over time. Speaker 1: Sure. Tony Mauro: And,- Speaker 1: Maybe the tariffs will be the end of the solution, whatever, right? Tony Mauro: Maybe it will. Speaker 1: Right. Tony Mauro: But history points to, it's probably not. And many, many of us, I can't remember how many trillions is probably in the 401Ks right now, but we have,- Speaker 1: That's a lot. Yeah. Tony Mauro: We all have an IOU. Speaker 1: Oh, yeah. It's almost 40 trillion, Tony. I'm glad you mentioned that. Tony Mauro: It's 40 trillion? Speaker 1: Yeah. Because the debt's 36 trillion, and they're always talking about the target that is, the retirement accounts is about 40 trillion out there. Tony Mauro: We got 40 trillion. It's all in traditional 401Ks and of course,- Speaker 1: A lot of tax money. Tony Mauro: A lot of tax money. The IRS wants it. We all have an IOU to Uncle Sam with that money. And they know that and they want pieces of it. Hence, they're changing rules as we speak, that nobody seems to pay attention to when somebody dies and you inherit some of this stuff because they want their money. Speaker 1: Yeah. Oh, yeah. And look, regardless of your stance, if DOGE does a good job and gets rid of some of the debt and some of the spending and our national debt's able to come down, maybe we don't have to tax ourselves into oblivion. Maybe that's the upside, right? Instead of going, we're in historically low tax rates, right, with the TCJA. Tony Mauro: Just going to say that. Yeah. Speaker 1: And at the time we're here taping this, Tony, we still don't know if that's going to get extended or not, right? Maybe it does, that's the prevailing wind, but maybe it does, maybe it doesn't. But at least if nothing else, if it does, then we don't have to necessarily go up in taxes. But you're still going to have to have a strategy for being tax efficient, because that's a big chunk of your retirement money. Tony Mauro: And that's what we focus on, is trying to be as tax efficient as possible, especially from the tax angle side, from being tax people that we want to make sure that they're not getting any more than they have to. Speaker 1: Right. Tony Mauro: And so you have to, especially on the distribution stage, really be strategic about it and make sure you're following the rules and that you're not overpaying just because you don't know any better. And I think that's really the gist of it. And I would also encourage anybody go out and google the history of the tax rates. And you're right, we're at historically low tax rates compared to where we were just even in the 80s. Speaker 1: Oh, yeah. Tony Mauro: And so,- Speaker 1: Well, even during the prior administration. If the TCJA expires, right, we're going back to what it was under Obama administration tax code. So even that goes up a little bit, so. Tony Mauro: But that goes up. Now one could say, well the way to fix all this is just raise taxes. Well,- Speaker 1: And nobody wants, I mean, look how we whine about,- Tony Mauro: Nobody's going to do it. Speaker 1: Yeah. I mean, we get all bent out of shape about the stock market dropping 10%. You want to pay 10% more in taxes? Of course not. Tony Mauro: Yeah. No. Nobody wants that. Nobody politically seems to want that. And of course, if you can't, it's like in business, if you can't control your spending, it doesn't matter how much you bring in. Speaker 1: Yep. That's what,- Tony Mauro: Right. I mean,- Speaker 1: Right. Tony Mauro: You got to do something. Speaker 1: Isn't it wild where we're at as a society? We all know we got to control spending, yet when you get somebody in there that starts doing it, they start screaming foul and going, why are you cutting spending? It's like, because we have to. We're $36 trillion in debt. That's crazy. Tony Mauro: That whole thing is,- Speaker 1: We're in the goofiest time period. Tony Mauro: Hours. Speaker 1: Yeah. Tony Mauro: Yeah. It's just crazy. But we have to, as advisors and as the public, we got to work with what we have. Speaker 1: Right. You got to play by the rules. Yep. Tony Mauro: We got to make it try to work for us and I think that's importance of planning. Speaker 1: Yeah. I've said forever and a day, that it's their chessboard. We have to play by the functioning rules of the chess piece, right? If we're that chess piece is able to move one step at a time, then that's all we can do, right? So,- Tony Mauro: We're done. Speaker 1: We have to do those different pieces. So again, no matter what your political slant is, the point of this is you don't want to kind of fall for any one thing, one side or the other. You want to have a good strategy in the event that it does come through, or the event that it doesn't come through. Because you want to make sure that you can hopefully retire as efficiently as possible in any administration or any economy or whatever the case might be. So final one, we'll wrap it up this week just on a couple of things to be careful with, because we knew these were going to be some big ticket items Tony, is Medicare misunderstanding. We'll switch gears and go to this one. Especially for the folks that are getting close to retirement, their first time stepping into it. My brother just got to 65. He's trying to get his bearings with understanding Medicare and the different things that it does. My mom's 80, in her mid 80s and she's quite used to it, so she's trying to school him on some things, but there's a lot of miscommunication out there on what it covers and what it doesn't. Tony Mauro: There's tons of it and it's very complex. And then you add on to the top of it the federal government bureaucracy, and it makes it kind of a nightmare for a lot of retirees. But I can tell you this, it certainly doesn't, do not be fooled, it does not cover everything in retirement. Speaker 1: Correct. Right. Tony Mauro: You've got to make sure that you have some of these gaps and things covered. Speaker 1: Yeah. Tony Mauro: And that's where what I do is I have a Medicare specialist that I consult with for clients because I can't keep up on all those rules and he helps me with clients. And now of course, if he ends up selling them some insurance they need, well, obviously that's how he gets paid. But nevertheless, he really has the ins and outs of what it does and doesn't cover. And then also, okay, if something's not covered, are you willing to spend X to get it covered? And,- Speaker 1: Good point. Tony Mauro: Like everything else, you got to make a decision. Do you want to keep that as a gap and take that risk, or is that risk too big? But boy, Medicare, I mean, it serves a good base, but it does not cover everything and you really need to be on that. Speaker 1: Yeah. Even within the same category too. And don't forget that they changed the way it's set up and providers can shift too. Like my mom recently, I think in the last couple of years she's gone through three different dentists because something happens with the program and the dentist she was going to says, "Well, we no longer accept it." Right. So, which is, I didn't think you could do that, but apparently you can. So different places can accept different things at different levels. So you have to kind of see who's in network, right, and who's out, all that kind of stuff. Tony Mauro: My dad's like that. And like I say, he's 83 and he is over insured in this area because he like buys everything just because he doesn't want any gaps. And I think he, we tried to get him not to do that and because he's actually kind of wasting a little money. Speaker 1: Sure. Sure. Tony Mauro: But sometimes it does work in his favor. Speaker 1: Makes him happy, right? So,- Tony Mauro: Makes him happy. Speaker 1: He walks in and he's covered, I guess, so. Tony Mauro: He's covered. Yeah, I mean, he's got coverage, but to your point, sometimes it changes and then he sees a lot of different doctors and whatnot, not because he wants to, because like the plan change covered and they say, "Nope, you got to go over here now." Speaker 1: Yeah, exactly. She sees the same thing. So a lot of misunderstandings when it comes to Medicare as well. So just make sure that you're working with some professionals who can help you. Most advisors, offices, if they don't have a Medicare person on staff, they usually have someone they refer people out to so they can kind of, especially someone who does this in and out every day, they kind of know the nitty-gritty a little bit better. So if you need some help with that, as always, make sure you're reaching or any of the stuff that we talk about, make sure that you're talking with a qualified pro like Tony and his team at Tax Doctor Inc. You can find them online at yourplanningpros.com. That is yourplanningpros.com. Don't forget to subscribe to us on Apple or Spotify here at Plan With The Tax Man. Simply type the name of the podcast into the search box. You can find it that way. Or just go to the website, make it easy on yourself, yourplanningpros.com. We'll have links in the descriptions below. And as always, we appreciate your time. Tony, thanks for hanging out my friend. And don't be too hard on folks when you pull some pranks on them in April. Tony Mauro: Oh, no. No, I'll just get my family and we'll see what happens. I'll let you know on the next podcast. Speaker 1: All right. Let me know how it goes. Yeah, my dad was crazy. He would pull something that got a little mean-spirited sometimes. It's like, all right, now you need to back it off a little bit there, bud. So have yourself a good one, folks. We'll see you next time here on Plan With The Tax Man. Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Episode 148: The Alternative Min Tax

The Grow Your Wealthy Mindset Podcast

Play Episode Listen Later Mar 26, 2025 13:54

The alternative minimum tax, or AMT, was implemented in 1969 to ensure that all Americans pay their fair share of taxes, and particularly targeted high-income individuals who had a lot of tax deductions. It was originally design to catch those high-income individuals who paid little to no tax but unfortunately, it was not indexed for inflation until 2012. Over time, the AMT started affecting tax payers in middle-class households. The Tax Cuts and Jobs Act of 2017 passed under President Trump's first term made significant changes to the AMT beginning with the 2018 tax year but that expire in 2025. Depending on what happens this year, we will likely see changes to the tax code. This could be a continuation of what was passed in 2017 or something new. This episode goes into the AMT before 2017, who it affects for 2025, and what could happen if the TCJA is not extended or replaced.Please subscribe and leave a review on your favorite Podcasting platform. If you want to start your path to financial freedom, start with the Financial Freedom Workbook. Download your free copy today at https://www.GrowYourWealthyMindset.com/fiworkbook You can learn more about Elisa at her website or follow her on social media. Website: https://ww.GrowYourWealthyMindset.com Instagram https://www.instagram.com/GrowYourWealthyMindset Facebook https://www.facebook.com/ElisaChiang https://www.facebook.com/GrowYourWealthyMindset YouTube: https://www.youtube.com/c/WealthyMindsetMD Linked In: www.linkedin.com/in/ElisaChiang Disclaimer: The content provided in the Grow Your Wealthy Mindset Podcast is for informational and entertainment only and should not be considered professional investment, legal, or tax advice. Dr Elisa Chiang is not a certified financial planner, attorney, or accountant. The views expressed are the personal opinion of Elisa Chiang and her guests and should not be taken as advice specific to you, the listener of the podcast. P...

donald trump americans podcasting depending amt tax cuts jobs act tcja elisa chiang growyourwealthymindset

The Politics Behind Your Taxes

Civics 101

Play Episode Listen Later Mar 25, 2025 55:19

Taxes on wages make up the bulk of federal revenue every year. Where does that money go, and who decides how much you should pay?The process is extremely complicated - and deeply political - which is why it's important for everyday taxpayers to understand how the people they elected choose to spend the money voters give out of their paychecks every year. We talk with tax policy expert Beverly Moran, a Paulus fellow at Boston College Law School and professor emerita at Vanderbilt, about how budget reconciliation works: where Congress decides where it will cut taxes, and how it will make up for those cuts. We also talk about how those decisionsaffect the vast majority of taxpayers, who earn most of their wealth from salary or wages... and how it looks different for the wealthiest Americans. Find Beverly's research on the impact of the 2017 TCJA here. Listen to our episodes on the history of the income tax in the United States, and how the tax return process works. We used a number of sources in this episode. Here are some, in order of appearance: How much revenue has the US government collected this year? from the US Treasury Department. Reconciliation explainer from the Congressional Budget Office.Budget Reconciliation: Tracking the 2025 Trump Tax Cuts from the Tax Foundation. What are itemized deductions and who claims them? from the Tax Policy Center. How did the TCJA change taxes of families with children? from the Tax Policy Center. The 2017 Tax Law Was Skewed to the Rich, Expensive, and Failed to Deliver on Its Promises from the Center on Budget and Policy Priorities. Lifting the SALT Cap: Estimated Budgetary Effects, 2024 and Beyond from Penn Wharton Budget Model at the University of Pennsylvania Wharton School of Business. Differences between the traditional CPI and Chained CPI from the Congressional Budget Office. Republicans say Medicaid cuts won't happen. But does their budget work without them? from NPR. Republicans want to lower taxes. The hard part is choosing what to cut. from the New York Times. Want our new "Civics is my cup of tea" mug? CLICK HERE TO DONATE AND GET YOURS!CLICK HERE: Visit our website to see all of our episodes, donate to the podcast, sign up for our newsletter, get free educational materials, and more! To see Civics 101 in book form, check out A User's Guide to Democracy: How America Works by Hannah McCarthy and Nick Capodice, featuring illustrations by Tom Toro.Check out our other weekly NHPR podcast, Outside/In - we think you'll love it!

Estate Tax Repeal & Its Impact on Planning

American Institute of CPAs - Personal Financial Planning (PFP)

Play Episode Listen Later Mar 21, 2025 19:33

In this episode of the AICPA Personal Financial Planning Podcast, host Cary Sinnett speaks with expert CPA estate planner Bob Keebler about the latest legislative efforts to repeal the estate tax. They discuss the implications for financial planners, strategies to consider, and how advisors can proactively help clients navigate potential changes. Key Takeaways: Estate Tax Repeal on the Horizon Bills have been introduced in Congress to repeal the estate tax while retaining the gift tax and repealing the generation-skipping transfer (GST) tax. The likelihood of repeal is uncertain, and any repeal may be temporary depending on future political shifts. Potential Scenarios for Estate Tax Reform Three possible outcomes: extension of the current Tax Cuts and Jobs Act (TCJA), total repeal, or a sunset of the current exemption levels. A sunset would likely be the least favorable for high-net-worth individuals, while total repeal could create new planning challenges. Implications for Estate Planning Strategies Portability rules could be affected, potentially eliminating the ability for a surviving spouse to use a deceased spouse's unused exemption. Trust structures, such as bypass and GST-exempt trusts, may need to be reviewed and adjusted before any legislative changes take effect. Planning Ahead: A Limited Window for Action Advisors should consider creating GST-exempt trusts in 2025 before any repeal is enacted to preserve tax benefits. Reviewing and updating existing estate planning documents is critical to avoid unintended consequences if the tax law changes. Access resources and events related to this podcast: Note: If you're using a podcast app that does not hyperlink to the resources, visit Libsyn (PFP) to access show notes with direct links. Understanding Estate Tax Sunset | Navigating Tax Changes for Expiring TCJA Provisions Estate planning for the TCJA sunset of the double exclusion amount Planning for tax changes and tax reform This episode is brought to you by the AICPA's Personal Financial Planning Section, the premier provider of information, tools, advocacy, and guidance for professionals who specialize in providing tax, estate, retirement, risk management and investment planning advice. Also, by the CPA/PFS credential program, which allows CPAs to demonstrate competence and confidence in providing these services to their clients. Visit us online to join our community, gain access to valuable member-only benefits or learn about our PFP certificate program. Subscribe to the PFP Podcast channel at Libsyn to find all the latest episodes or search “AICPA Personal Financial Planning” on your favorite podcast app.

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More Tariffs, More Problems? | This Week's Economy Ep. 103

Let People Prosper

Play Episode Listen Later Mar 17, 2025 15:58

It's about time Washington took our nation's spending crisis seriously! The House narrowly passed a continuing resolution to avoid a partial federal government shutdown (so close! ha!). Meanwhile, Elon Musk and Senator Lindsey Graham highlight concerns about Social Security spending and insolvency. These are positive steps, but politicians in D.C. and across the country must take meaningful action to spend less, make TCJA permanent, deregulate, and ultimately get the government out of the way.This week, I dive into the federal funding debate, Social Security, the costs of tariffs, school choice chances in Texas, Trump's energy policy, the new Labor Secretary appointment, and institutional investors' impact on housing.For more insights, visit vanceginn.com and get even greater value with a subscription to my Substack newsletter at vanceginn.substack.com.

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Legal News for Mon 3/17 - CFPB Reinstates, Trump Targets More Law Firms and Defies Court Orders, WH's Role in TikTok Sale and Trump Admin Plan to Starve Social Security and Medicare

Minimum Competence

Play Episode Listen Later Mar 17, 2025 8:17

This Day in Legal History: National Referendum on ApartheidOn March 17, 1992, South Africa took a decisive step toward dismantling apartheid through a historic national referendum. White South African voters were asked whether they supported the government's efforts to end apartheid and negotiate a new, democratic constitution. An overwhelming 68.7% voted in favor, signaling broad support for ending over four decades of racial segregation. This referendum provided then-President F.W. de Klerk with the political mandate to continue negotiations with the African National Congress (ANC) and other groups. The result was a major victory for the anti-apartheid movement, which had long fought against the country's system of institutionalized racial oppression.The referendum was limited to white voters, who had historically benefited from apartheid, making their approval a crucial moment in South African history. It paved the way for the country's first multiracial elections in 1994, in which Nelson Mandela was elected president. With this, South Africa officially transitioned from an apartheid state to a democracy, enshrining equal rights for all citizens. The vote also marked the beginning of legal reforms that led to the adoption of a new constitution in 1996. While the end of apartheid did not immediately erase economic and social inequalities, the referendum remains a defining moment in the country's legal and political history. It demonstrated that legal systems, even when designed to uphold injustice, can be reformed through democratic means.A federal judge ruled that the Consumer Financial Protection Bureau (CFPB) must reinstate probationary employees it had recently terminated. As a result, the agency is bringing back those workers, along with most term employees, and providing them with back pay. However, term employees with more than two years of service were not reinstated. The CFPB had initially fired 70 enforcement attorneys and up to 100 other employees after acting Director Russell Vought took over in February. The judge's decision is part of a broader legal battle over federal workforce reductions, with similar rulings affecting multiple agencies. Despite this setback, the Trump administration remains committed to deep staffing cuts across federal agencies, with reduction plans already submitted to the Office of Personnel Management. The firings had faced opposition from the National Treasury Employees Union, which reached an agreement with the CFPB to pause additional terminations while another court considers an injunction. The reinstatement process has been messy, with workers unsure of their status and vendor contracts disrupted. However, legally mandated CFPB functions, such as consumer response, are being prioritized for restoration.CFPB Brings Back Probationary Employees After Judge's RulingTrump has escalated his attacks on major law firms, this time targeting Paul Weiss, a firm known for representing top financial institutions and engaging in high-profile pro bono work. His executive order directs federal agencies to cut ties with companies that are Paul Weiss clients and suspend the firm's lawyers' security clearances. The move follows similar actions against Perkins Coie and Covington & Burling. Paul Weiss has deep ties to Wall Street, with clients including JPMorgan Chase, Goldman Sachs, and Apollo Global Management. Some of these corporate leaders have criticized Trump's tariff policies, potentially influencing his decision to go after the firm.Trump's order highlights Paul Weiss's past work, including its involvement in a lawsuit against the Proud Boys and Oath Keepers over the January 6 Capitol riot. The firm has a long history of civil rights advocacy, from Brown v. Board of Education to LGBTQ+ and voting rights cases. Critics argue Trump's actions are politically motivated, targeting firms with Democratic connections while ignoring their bipartisan donor base. A federal judge previously blocked a similar order against Perkins Coie, and Paul Weiss is expected to mount a strong legal challenge. However, even if the order is overturned, the chilling effect is real—firms risk losing business from clients wary of crossing Trump. Some industry experts believe this could push law firms to unite against political interference, but whether collective action emerges remains uncertain.Trump Fights Paul Weiss as Wall Street Seeks President's EarTrump targets law firm Paul Weiss in order restricting government access | ReutersThe Trump administration deported hundreds of Venezuelan migrants despite a federal judge's order blocking the move. The deportations targeted alleged members of the Tren de Aragua gang, whom the administration labeled as “terrorists.” The White House dismissed the court's authority, arguing that a single judge could not override the president's powers on immigration and national security. Judge James Boasberg had ruled that Trump's use of the Alien Enemies Act to justify the deportations was unlawful, as the law applies only to conflicts “commensurate to war.” Despite this, flights carrying the migrants landed in El Salvador, where President Nayib Bukele publicly mocked the judge's ruling and confirmed the men were being imprisoned.Legal experts, including the ACLU, argue the administration is in open defiance of the court and may have violated constitutional checks and balances. The White House claimed that some migrants had already been deported before the judge's order, but it remains unclear if others were removed afterward. Critics see this as an unprecedented challenge to judicial authority, while Trump defended the deportations, calling the migrants "bad people" and insisting the situation amounted to war. The legal battle over these actions is expected to continue, with calls for the U.S. government to reverse any unlawful removals.Trump administration deports Venezuelans despite court order, says judge has no authorityThe White House is taking an unprecedented role in overseeing the sale of TikTok's U.S. operations, with Vice President JD Vance leading the process. Instead of a traditional investment bank managing the auction, Vance's legal team is directly engaging with bidders and advising on their offers. President Trump has emphasized his control over the sale, claiming multiple groups are interested, while also suggesting the U.S. government could take a 50% stake in TikTok's American assets.The sale process is highly unusual, lacking a defined valuation or clear asset structure, and ByteDance, TikTok's Chinese parent company, has shown minimal engagement. Potential buyers, including investors like Frank McCourt and Kevin O'Leary, face an April 5 deadline to reach a deal. However, Beijing's involvement and the possibility that ByteDance could simply shut down TikTok in the U.S. add further uncertainty.While the U.S. government has previously intervened in corporate deals for national security or economic stability reasons, experts question whether TikTok meets such criteria. Trump, who initially sought to ban TikTok, has since acknowledged its role in helping him gain young voters. The app's sale price remains uncertain, largely depending on whether its valuable recommendation algorithm is included. With intense competition among bidders and political interests shaping the process, the outcome remains unpredictable.The White House's unusual role as dealmaker in TikTok sale | ReutersIn a piece I wrote for Forbes this weekend, I lay out what I reckon is the Trump administration's plan to dismantle Social Security and Medicare. The Trump administration's proposal to eliminate taxes for individuals earning under $150,000 sounds appealing at first but carries severe consequences. Social Security and Medicare rely heavily on payroll taxes, which most workers in this income range pay more than income taxes. If these taxes are removed, the programs will be starved of funding, leading to either massive deficit spending, extreme benefit cuts, or a shift to regressive taxes like sales taxes. The proposal, combined with extending the 2017 Tax Cuts and Jobs Act (TCJA), would disproportionately benefit the wealthy while leaving the middle class to shoulder the remaining tax burden. The TCJA already made corporate tax cuts permanent while setting individual cuts to expire by 2025, favoring the rich. If this new plan moves forward, those earning just above $150,000 could become the last major tax-paying bracket, while state and local taxes would likely rise to compensate. The ultra-wealthy, who benefited the most from previous tax cuts, are unlikely to pick up the slack. Rather than a tax break for workers, the proposal appears to be a backdoor attempt to dismantle entitlement programs. If no one is paying in, no one gets benefits out—a reality Trump's allies don't want to admit.Trump Administration's No Taxes Under $150k Proposal Is A Disaster This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

20250311 - Real world consequences of the TCJA

RestoreLiberty.US

Play Episode Listen Later Mar 16, 2025 14:59

Nancy, a veteran tax preparer, walks you through real world tax return examples of what happens if the Tax Cuts and Jobs Act is not made permanent.

consequences real world tax cuts jobs act tcja

April Fool's: Beliefs That Fool Retirement Savers The Most

Retirement Planning - Redefined

Play Episode Listen Later Mar 13, 2025 14:51

April Fool's Day is all about jokes and pranks, but when it comes to retirement planning, getting fooled can cost you real money. Today, we're uncovering the beliefs that fool retirees and pre-retirees into making bad financial moves. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents. Host: April Fool's Day is all about jokes and pranks, but when it comes to retirement planning, getting fooled can cost you some real money. So we're going to talk about that. A little early for April Fool's, maybe, but we're going to still talk about it this week here on the podcast. So let's get into it. Hey, everybody, welcome to the show. Thanks for hanging out with us here on Retirement Planning Redefined, with John, and Nick, and myself, as we talk investing, finance, and retirement. And we're taping this a couple of weeks before April Fool's Day. It should drop right around there, but we'll have a conversation with the guys. What's going on, Nick, buddy, how are you? Nick: Good, good. Staying busy. Host: Yeah. Well, that's always good. Good stuff. John, I know you and I were just chatting before we got rolling, we're worn out. But you hanging in there? John: Yeah, doing all right. And don't let Nick fool you, he's got a lot going on. Host: He's got a lot going on. John: You tell him the news. Host: He did. Yeah. Nick: John's favorite topic. Got engaged a little over a month ago. Host: Awesome, awesome. Nick: Yeah, in the full throws of wedding planning, which is, of course, extremely exciting. Host: That you're doing a little of, or a lot of, or zero of? Nick: I would say some impact. My fiance is originally from Columbia, and the way that they do things for weddings there is a lot different than here. Host: Okay, cool. Nick: So yeah, so there's a little bit of translation from that perspective. Host: Nice, nice. Nick: Yeah, that's interesting. But it'll be good. Host: Very cool. Nice. Nick: It'll be good. Host: Well, congratulations. Very, very cool. Nick: Thank you. Appreciate it. Host: All the best to the newlyweds. Very good stuff. We won't pull any April Fool's Day pranks on you then, in that regard. We'll just take to the financial stuff here this week. So the idea, guys, being that, look, the media is nonstop, the onslaught of social media, internet, whatever. There's always something out there. And you just want to make sure you're vetting some stuff before you... Fool's gold, right? Before you just jump into something and maybe make a mistake. So we'll start with tax conversation. So as at this time that we're taping the podcast, we don't know if the TCJA will get extended or not. Odds are fairly good, we'll see how the year plays out. But if they don't, they expire at the end of the year, the current tax code that we're under. So are you taking that information and maybe thinking, hey, I don't have to do any tax planning for the future, because maybe the taxes are going to stay really low like they have been historically? Or are you being proactive and saying, "Well, there's a chance that taxes could still go up, because we owe a lot of money"? So whoever wants to jump in, get started on that. But what do you think about the tax situation and not fooling yourself into just thinking everything's going to stay exactly the same? Nick: Yeah, I can start with this one. So one of the things that we really emphasize with clients and people that we work with is, especially when it comes to taxes, that the best thing that you can do is to expect change. So whether it's something changing at the end of this year, a couple years from now, whatever it is, the goal is to allow yourself to be adaptable to whatever's happening. So the easiest way to do that is to have different types of accounts. So to have Roth accounts, pre-tax accounts, and more of a traditional brokerage account where we can factor in capital gains instead. But even more specific, when it comes to the whole concept of potentially underestimating taxes, there's still a lot of confusion for people on how much of their social security is going to be taxable, or include-able in their taxable income. I had a conversation with my parents about it, and I had to convince them that I was correct and knew what I was talking about after 20 years, because of a way that something that they heard on the radio or saw on TV was phrased, made it very confusing to them. So just- Host: Sure, I mean, there's the conversation that they might get rid of it, but they haven't done it yet. So you still got to be planning for stuff. Nick: Yeah. But even outside of that, the way... It was interesting, and I do want to bring it up now that I remember it. Host: Sure. Nick: The way that it was being marketed was that the concept of, "Hey, most people don't know that your social security, how much you pay in taxes on your social security will go up at age 73." And so, really, the concept of that was, "Hey, when required minimum distributions kick in, and you have more taxable income, there's a chance that more of your social security income will be include-able in your tax and how much you pay in taxes." So it was kind of a roundabout way to scare people. So it allowed us to have the conversation about, for a huge chunk of people, 85% of their social security is going to be include-able in their taxable income, at least how the law is now, and just how other types of income may impact that. Host: Oh, and that's a great point though. That really highlights exactly the point of this conversation, is that depending on how you phrase things, it's very easy to get misled by stuff. And so that's a great illustration of that, Nick. So thank you for sharing that. And it definitely walks that... And that's what all these are going to do. John, like the next one around Medicare misunderstandings. So my mom's forever, she's 83, she's forever going... And my brother's now, he's over 65, so she's educating him. She's schooling him on the stuff she's been doing for a while with Medicare. And it's like, it doesn't cover everything. And people still sometimes think that, "Hey, at least I've got to 65. Now I've got this Medicare thing. I'm in good shape." And it is a great program, in a lot of ways, but it doesn't cover everything. John: Yeah, that's accurate. And a lot of people, unfortunately, don't realize that. And a big thing that, when you get Medicare age, age 65, Medicare has a lot of moving parts to it, and there's a lot of different options. Host: Oh, yeah. John: So depending on whether you go, let's say, on an Advantage Plan, if you're on Plan F, or G, you get the supplement, it's going to determine what is covered. And then, also, you want to look at, do your current providers even take Medicare? So you might be looking at it and think that you're going to be all set- Host: Great point. John: ... And then you come to find out that your provider who you like doesn't even take it. So yeah, it definitely does not cover everything. So when you're doing your planning, when we do it, we always try to make sure, "Hey, this is our set price for Medicare." Then we adjust as we determine what plan the client's going to go with or help them determine what's their best option. But also, you want to plan for some out-of-pocket medical expenses for what it doesn't cover. Host: Yeah, I think she's changed her dentist a couple of times just because they don't take it anymore. They changed or whatever. And of course, dental being one of those things that people often don't realize is, a lot of stuff's not covered there. John: And prescriptions. Host: Yeah, and eye. The eye stuff is really interesting. Some of the eyeglass stuff, like going to the eye doctor for just basic optometry stuff is not covered. But then the cataract stuff, some of it was. So it's very strange. So you want to make sure you're understanding what is and what isn't taken care of there with Medicare. So that's certainly a good one as well. Nick, what about the set it and forget it retirement plan strategy. When you're talking about things getting kind of mis-sold or kind of mislabeled out there, some people will be like, "Hey look, you got to get a plan together. You put stuff in there. You let it ride and you roll from there." Right? Well, some things can set it and forget it, but some things can't either. Nick: Yeah. So kind of a good example of maybe the set it and forget it concept, saw come up a little bit more in the last couple of years, where had some clients that were moving towards retirement, and they had done a good job of saving and building up the nest egg, and they were somewhat familiar with, maybe take 4% a year and I can live off of 4% a year. But with rates being in that point of time where we clicked up, where they could get four to five, five and a half percent in money market CDs, et cetera, they had kind of just said, "Hey, want to shift to the sidelines, want to avoid the market. I'm just going to take my 4-5% and live off the interest." And the conversations that we had to really have were, conceptually, that'll be good for now, for the next year or two. But most likely, there's going to be a point in time within the next three to five years that rates are going to change, and that 5% might turn into 3%, or two and a half percent. And even on, let's just use 2 million bucks. So maybe they could do 5% on 2 million is a hundred grand a year, good to go. Now if we shift to two and a half, 50 grand a year off of the portfolio, with their intention of trying to maintain principle, that starts to rewind a little bit. And so, it's a good example of realizing how the dynamics of a plan change, and that if you're only factoring in what's happening now, or in the next short term, next couple years, that not understanding updating and adjusting your plan to current circumstances, or maybe a broader sense of what could happen, could really put somebody in a difficult position. Host: Yeah, that's a great point as well. So there's so much stuff you got to think about when you're factoring all these things in. And John, the market's been choppy. The time we're taping this, it's been a little choppy out there. So some of the tariff conversations- John: Just a little bit. Host: A little bit, or whatever is kind of making the market uneasy. But chasing and obsessing, not necessarily just over the market highs, but also high dividend stocks. So sometimes people will say, "Well, a good alternative to doing X or Y is to get high dividend stocks." What's some thoughts there? John: There's different strategies for what you're trying to accomplish. And one of the problems with this one, especially if you're going to retirement and you're thinking of, "Hey, I'm just going to have high dividend paying stocks," is that those things can change. If all of a sudden we have a recession, or the economy's not doing well, or that particular company's not doing well, guess what they could do? They could just change your dividend. So if you had a plan, going back to what Nick's example, they're like, "Hey, I've got this stock. It's giving me 4- 5%," and you think you're okay. And all of a sudden some news comes out and that dividend drops, and now your whole plan just slightly changed. So with dividend paying stocks, they're not guaranteed. And depending on how high of a dividend paying stock it is, the higher sometimes could be correlated with a little bit being more aggressive and more risk. So I've seen, this actually reminds me of a meeting I just had this week, where someone was in talking to a friend of theirs, and they were trying to say, "Hey, just put all your stuff in these high dividend paying rates," and all these things. And I'm looking at it like, "Hey, this is pretty aggressive. You're getting a good yield. But if we have some type of pullback, not only will your dividend potentially go down, but the value of this stock could also drop." Host: Sure. Yeah. John: So it's just important to understand what you're in and what could change. Nick: I think I'd also like to jump in on that. Host: Sure. Nick: Because I've had this conversation with some clients quite a bit. And one of the things that I tried to emphasize is that if we look over, because a lot of times the generation that's been drilled with dividend paying stocks is a generation now that's kind of entered into retirement, where they were really starting to invest in coming up through the period of higher interest rates, when dividend paying stocks perform better. And frankly, if you look over the last 10, really post recession, post '09 and 2010 recession, in an environment with lower rates, if somebody was invested the last 15 years in only dividend paying stocks, then the returns that they have gotten are pennies compared to being involved in- Host: Wow. Nick: ... growth related investments. Think of tech, think of the Magnificent Seven now, think of all the areas of the massive growth over the last 10 or 15 years, and there was significant opportunity cost. So the environment that we're in, where those companies were really rewarded for, the cost of borrowing was low, the ability to reinvest and grow was high. Even when you factor in stock buybacks, I mean, you had companies that were making more money in stock buybacks than they were in producing their own products. So the environment of what's happening has a significant impact on that as well. Host: That's great points, guys. So it's easy to get lulled into whatever kind of marketing, or whatever kind of news headline, or whatever the case is. So just make sure that you're not falling for it. Or at least not without vetting some things out and talking with your financial professionals. So if you've got some questions, as always, you need some help, you should always run anything you hear by on our podcast, or really any other, even the big talking head shows, talk with someone local in your area about your unique situation so that you're getting some hands-on advice and conversation. And if you need some help, John, and Nick, and the team are available at pfgprivatewealth.com, that's pfgprivatewealth.com. So you can subscribe to the podcast. You can find it there. Of course, you can get some time on the calendar through the website, lots of good tools, tips, and resources. And of course, you can subscribe to us on Apple, or Spotify, or whatever podcasting app you like using. So again, pfgprivatewealth.com. That's going to do it this week. Guys, thanks for hanging out, as always, and breaking it down. Congratulations once again, Nick, on the upcoming nuptials. And John, buddy, have a great week. We'll see you next time here on Retirement Planning Redefined.

tv spotify apple staying llc retirement insurance columbia odds investments guys beliefs congratulations fool april fools medicare cds roth savers magnificent seven plan f tcja john you john yeah john so john there nick it nick yeah nick john nick so john just

America's Roundtable with Senator Marsha Blackburn | Advancing Principled Policies — DOGE Acts, Tax Administration Simplification Act | Accountability and Transparency | Combatting Anti-Semitism

united states america american amazon spotify donald trump google israel china science washington entrepreneur law state michigan elon musk dc tennessee alabama south acts congress veterans white house jobs fbi economy hong kong accountability louisiana mississippi midwest arkansas senate abuse commerce small business roundtable taxes taiwan fraud waste senators transparency beijing irs human rights chamber policies golden age epstein strengthening collaborative advancing trump administration antisemitism doge semitism blackburn us congress congressional districts combatting taxpayers taipei healthy food chinese communist party maha sotu united states senate data security prescription drugs kash patel communist china state of the union address simplification united states house consumer protection principled judiciary committee marsha blackburn finance committee security threats ranking member tsai ing harmeet dhillon volunteer state tcja transportation committee product safety supertalk united states border patrol tax administration commerce subcommittee

Play Episode Listen Later Mar 9, 2025 16:19

Join America's Roundtable (https://americasrt.com/) radio co-hosts Natasha Srdoc and Joel Anand Samy with U.S. Senator Marsha Blackburn, senior senator for Tennessee and the first woman to represent the Volunteer State in the United States Senate. She serves on the Deputy Whip Team and is a member of the Finance Committee; the Commerce, Science & Transportation Committee; the Veterans' Affairs Committee; and the Judiciary Committee. Senator Marsha Blackburn serves as the Ranking Member on the Commerce Subcommittee on Consumer Protection, Product Safety, and Data Security and on the Judiciary Subcommittee on Human Rights and the Law. Before her election to the Senate, Marsha represented Tennessee's 7th Congressional District in the United States House of Representatives. The conversation focuses on the following topics: ✅ President Trump's State of the Union Address, presenting his vision for a Golden Age of America. ✅ Senator Blackburn requiring transparency and accountability, working with FBI Director Kash Patel in obtaining unredacted Epstein logs and other pertinent materials ✅ Senator Blackburn spearheading DOGE Acts to hold the federal government accountable for managing taxpayer dollars. Collaborative efforts with Elon Mask in making the federal government more efficient and slash wasteful spending. ✅ Strengthening the economic partnership between the U.S. and Taiwan. ✅ Senator Blackburn's recently introduced Tax Administration Simplification Act, to provide straightforward, taxpayer-focused improvements to streamline tax filing and payment for individuals and small businesses. ✅ Strengthening US-Israel ties and combating anti-Semitism with new leadership in Congress and the White House. ✅ Making America Healthy Again | Healthy foods and eating habits for a healthier America. Throughout her time in Congress, Marsha has led the fight to hold Communist China accountable. Her in-depth analyses of the Chinese Communist Party's threats to American sovereignty have prompted Congress to examine legislation countering Beijing's malign influence on global supply chains, technology infrastructure, and international organizations. After Beijing took over the once autonomous region of Hong Kong in 2019, Marsha led bipartisan legislation, which was signed into law by President Trump, that prohibits the U.S. export of crowd control equipment to the Hong Kong Police Force. Her bipartisan Open Technology Fund Authorization Act, which supports internet freedom by addressing authoritarian regimes' efforts to censor the internet, was also signed into law. At the same time Marsha has stood up to Communist China, she has worked to bolster the U.S.-Taiwan relationship. In August 2022, she visited Taiwan, met with President Tsai Ing-wen in Taipei, and called to strengthen connections between the U.S. and Taiwan. During this visit, Marsha made her stance clear: Taiwan is a country. On border policy, Marsha bases her approach on the simple truth that until our borders are secure, every town will be a border town and every state will be a border state. In the Senate, she has led the charge to fully fund the United States Border Patrol, restart construction of a physical barrier, impose harsher criminal penalties for drug smuggling, and fight for law and order on behalf of the thousands of women and girls lost to cross-border human trafficking. Further reading: Blackburn, Hassan, Colleagues Introduce the “Patients Before Middlemen Act” to Bring Down Cost of Prescription Drugs (https://www.blackburn.senate.gov/2025/3/health%20care/blackburn-hassan-colleagues-introduce-the-patients-before-middlemen-act-to-bring-down-cost-of-prescription-drugs) Blackburn, Kelly Push for More Federal Resources to Combat Fentanyl Crisis in Tennessee (https://www.blackburn.senate.gov/2025/2/crime/national%20security/blackburn-kelly-pushes-for-more-federal-resources-to-combat-fentanyl-crisis-in-arizona) Blackburn, Schatz Introduce Bill to Strengthen U.S.-Taiwan Partnership, Safeguard U.S. from Communist China's Security Threats (https://www.blackburn.senate.gov/2025/2/china/jobs%20and%20economy/national%20security/blackburn-schatz-introduce-bill-to-strengthen-u-s-taiwan-partnership-safeguard-u-s-from-communist-china-s-security-threats) americasrt.com (https://americasrt.com/) https://ileaderssummit.org/ | https://jerusalemleaderssummit.com/ America's Roundtable on Apple Podcasts: https://podcasts.apple.com/us/podcast/americas-roundtable/id1518878472 Twitter: @MarshaBlackburn @ileaderssummit @NatashaSrdoc @JoelAnandUSA @supertalk America's Roundtable is co-hosted by Natasha Srdoc and Joel Anand Samy, co-founders of International Leaders Summit and the Jerusalem Leaders Summit. America's Roundtable (https://americasrt.com/) radio program - a strategic initiative of International Leaders Summit, focuses on America's economy, healthcare reform, rule of law, security and trade, and its strategic partnership with rule of law nations around the world. The radio program features high-ranking US administration officials, cabinet members, members of Congress, state government officials, distinguished diplomats, business and media leaders and influential thinkers from around the world. Tune into America's Roundtable Radio program from Washington, DC via live streaming on Saturday mornings via 65 radio stations at 7:30 A.M. (ET) on Lanser Broadcasting Corporation covering the Michigan and the Midwest market, and at 7:30 A.M. (CT) on SuperTalk Mississippi — SuperTalk.FM reaching listeners in every county within the State of Mississippi, and neighboring states in the South including Alabama, Arkansas, Louisiana and Tennessee. Listen to America's Roundtable on digital platforms including Apple Podcasts, Spotify, Amazon, Google and other key online platforms. Listen live, Saturdays at 7:30 A.M. (CT) on SuperTalk | https://www.supertalk.fm

D's Feeling The Pain,In The End The D Party Will Cease To Exist Once It's All Exposed – Ep. 3588

X22 Report

Play Episode Listen Later Mar 6, 2025 103:04

Watch The X22 Report On Video No videos found Click On Picture To See Larger Picture The [CB] has started the narrative that the tax cuts are going to the wealthy and his policies will bring the country into a recession. The country is already in a recession. Trump has now added more tariffs to the mix. Canada and Mexico will fold and give in to his demands. Tariffs will create jobs over the long run. The economic transition has begun. The [DS] is feeling the pain, they were put on display during Trumps congressional speech. The people saw how the Ds hate our country and how they were protecting their money laundering operation. The pain they are feeling will increase as their crimes are released to the public. In the end the D party will cease to exist once it's all exposed. (function(w,d,s,i){w.ldAdInit=w.ldAdInit||[];w.ldAdInit.push({slot:13499335648425062,size:[0, 0],id:"ld-7164-1323"});if(!d.getElementById(i)){var j=d.createElement(s),p=d.getElementsByTagName(s)[0];j.async=true;j.src="//cdn2.customads.co/_js/ajs.js";j.id=i;p.parentNode.insertBefore(j,p);}})(window,document,"script","ld-ajs"); Economy Trump's lies on tax cuts are another gut punch to America's working-class You know the old expression, numbers don't lie? Well, they do when the numbers come out of President Trump's mouth. Trump's numbers don't add up. If he were getting a math grade for his speech to the joint session of Congress, he'd fail miserably. Trump is worse than a student who hasn't done his homework. He's a president who routinely lies to mislead the public, justify his wrongdoing and distract us from the real harm he's doing to Americans and the lasting damage he's doing to America. Trump made a lot of promises about a new “golden age” for America. But in reality, he and congressional Republicans are getting ready to sell out Americans and our future so he can deliver massive tax cuts to billionaires like Elon Musk. Source: thehill.com Yes, the $4.5 trillion in tax cuts you're referring to is largely tied to the continuation of the Trump tax cuts, specifically those enacted under the 2017 Tax Cuts and Jobs Act (TCJA). Many of the TCJA's provisions, particularly the individual income tax cuts, are set to expire at the end of 2025. Extending these expiring provisions is a significant part of what's being discussed in current budget proposals. The Congressional Budget Office (CBO) and other analyses estimate that permanently extending the TCJA's individual, estate, and certain business tax provisions would cost around $4.6 trillion over a 10-year period (2025–2034), including debt service costs. This figure aligns closely with the $4.5 trillion often cited in recent Republican budget resolutions, such as the House Budget Committee's plan released in February 2025. That proposal explicitly allocates $4.5 trillion to the Ways and Means Committee to "lock in tax cuts," which is widely understood to mean extending the TCJA provisions that would otherwise expire. The TCJA lowered rates across all brackets. For example, the 15% bracket dropped to 12%, and the 25% bracket became 22%. If it expires, rates revert to pre-2017 levels (10%, 15%, 25%, 28%, 33%, 35%, 39.6%). A single filer earning $50,000 in 2025, for instance, would see their marginal rate jump from 22% to 25%, increasing their tax bill by a few hundred dollars annually. Standard Deduction: The TCJA nearly doubled it—$13,850 for singles and $27,700 for married couples in 2023 (adjusted yearly for inflation). Post-expiration, it drops back to around $6,350 and $12,700 (pre-2017 levels, plus inflation). This means more income gets taxed, especially for those who don't itemize, which is most working people. A couple taking the $27,700 deduction now could owe taxes on an extra $15,000 or so, adding roughly $3,000 to their bill at a 22% rate. Child Tax Credit: The TCJA bumped it to $2,000 per kid (with $1,

What Will Tariffs Do to the U.S. Dollar?

Small Business Tax Savings Podcast | JETRO

Play Episode Listen Later Mar 4, 2025 10:06

Our U.S. Public Policy and Currency analysts, Ariana Salvatore and Andrew Watrous, discuss why the dollar fell at the beginning of the first Trump administration and whether it could happen again this year. ----- Transcript ----Ariana Salvatore: Welcome to Thoughts on the Market. I'm Ariana Salvatore, Morgan Stanley's U.S. Public Policy Strategist.Andrew Watrous: And I'm Andrew Watrous, G10 FX Strategist here at Morgan Stanley.Ariana Salvatore: Today, we'll focus on the U.S. dollar and how it might fare in global markets during the first year of the new Trump administration.It's Tuesday, March 4th at 10am in New York.So, Andrew, a few weeks ago, James Lord came on to talk about the foreign exchange volatility. Since then, tariffs and trade policy have been in the news. Last night at midnight, 25 percent tariffs on Mexico and Canada went into effect, in addition to 10 percent on China. So, let's set the scene for today's conversation. Is the dollar still dominant in global currency markets?Andrew Watrous: Yes, it is. The U.S. dollar is used in about $7 trillion worth of daily FX transactions. And the dollar's share of all currency transactions has been pretty stable over the last few decades. And something like 80 percent of all trade finance is invoiced in dollars, and that share has been pretty stable too.A big part of that dollar dominance is because of the depth and safety of the Treasury security market.Ariana Salvatore: That makes sense. And the dollar fell in 2017, the first year of the Trump administration. Why did that happen?Andrew Watrous: Yeah, so 2017 gets a lot of client attention because the Fed was hiking, there was a lot of uncertainty about would happen in NAFTA, and the U.S. passed a fiscally expansionary budget bill that year.So, people have asked us, ‘Why the U.S. dollar went down despite all those factors?' And I think there are three reasons. One is that even though the possibility that the U.S. could leave NAFTA was all over the headlines that year, U.S. tariffs didn't actually go up. Another factor is that global growth turned out to be really strong in 2017, and that was helped in part by fiscal policy in China and Europe. And finally, there were some political risks in Europe that didn't end up materializing.So, investors took a sigh of relief about the possibility that I think had been priced in a bit that the Eurozone might break up. And then a lot of those factors went into reverse in 2018 and the U.S. dollar went up.Ariana Salvatore: So, applying that framework with those factors to today, is it possible that we see a repeat of 2017 in terms of the U.S. dollar decline?Andrew Watrous: Yeah, I think it's likely that the U.S. dollar continues to go lower for some of the same reasons as we saw in 2017. So, I think that compared to 2017, there's a lot more U.S. dollar positive risk premium around trade policy. So, the bar is higher for the U.S. dollar to go up just from trade headlines alone.And just like in 2017, European policy developments could be a tailwind to the euro. We've been highlighting the potential for German fiscal expansion as European defense policy comes into focus. And unlike in 2017, when the Fed was raising rates, now the Fed is probably going to cut more this year. So that's a headwind to the dollar that didn't exist back in 2017.So, on trade, Ariana. What developments do you expect? Do you think that Trump's new policies will make 2025 different in any way from 2017?Ariana Salvatore: So, taking a step back and looking at this from a very high level, a few things are different in spite of the fact that we're actually talking about a lot of similar policies. Tariffs and tax policy were a big focus in 2017 to 2019, and to be sure, this time around, they are too, but in a slightly different way.So, for example, on tax cuts, we're not talking about bringing rates lower on the individual and corporate side. We're talking about extending current policy. And on tariffs and trade policy, this round I would characterize as much broader, right? So, Trump has scoped in a broader range of trading partners into the discussion like Mexico and Canada; and is talking about a starting point that level-wise is much higher than what we saw in the whole 2018 2019 trade friction period.The highest rate back then we ever saw was 25 percent, and that was on the final batch of Chinese goods, that list four. Whereas this time, we're talking about 25 percent as a starting point for Mexico and Canada.I think sequencing is also a really important distinction. In 2017, we saw the tax cuts through the Tax Cuts and Jobs Act (TCJA) come first, followed by trade tensions in 2018 to 2019. This time around, it's really the inverse. Republicans just passed their budget resolution in the House. That lays the groundwork for the tax cut extensions.But in the meantime, Trump has been talking about tariff implementation since before he was even elected. And we've already had a number of really key trade related catalysts in the just six weeks or so that he's been in office.Andrew Watrous: So, you mentioned expectations for fiscal policy. What are recent developments there, and what do you think will happen with U.S. fiscal?Ariana Salvatore: I mentioned the budget resolution in the house that was passed last week. And you can really think of that as the starting point for the reconciliation process to kick off. And consequently, the extension of the Tax Cuts and Jobs Act.To be clear, we think that House Republicans will be able to align behind extending most of the expiring Tax Cuts and Jobs Act, but that's still in the books until the end of 2025. So, we see many months needed to kind of build this consensus among cohorts of the Republican caucus in Congress, and we already know there's some key sticking points in the discussion.What happens with the SALT [State and Local Tax] cap? What sort of clawbacks occur with the Inflation Reduction Act? All these are disagreements that right now are going to need time to work their way through Congress. So not a lot of alignment just yet. We think it's going to take most of the year to get there.But ultimately, we do see an extension of most of the TCJA, which is like I said, current law until the end of 2025.But Andrew from what I understand when it comes to fiscal policy, there are really two stages in terms of the market impact that we saw in the last administration. Can you walk us through those?Andrew Watrous: Yeah, so one lesson from 2016 to 2018 is that there were really two stages of when fiscal developments boosted the dollar. The first was right after the U.S. election in 2016, and the second was much later after the Tax Cuts and Jobs Act passed. So right after the 2016 election, within a couple of weeks, the dollar index rallied from 98 up to 103, and 10-year Treasury yields rose as well.And then things sort of moved sideways in between these two stages. Ten-year Treasury yield just moved sideways. Fiscal wasn't as supportive to the U.S. dollar. And as we know, the dollar went down. And then we had the second stage more than a year later. So, the TCJA was passed in December 2017. And then the dollar rallied after that along with the rise in Treasury yield.So, we think that now, what we've seen is actually very similar to what happened in 2017, where the dollar and yields moved a lot after the 2024 election; but now the budget reconciliation process probably won't be a tailwind to the dollar until after a tax cuts extension passes Congress. And as you mentioned, that's not going to be for many, many months. So, in the interim, we think there's a lot of room for the dollar to go down.Ariana Salvatore: And just to level set our expectations there to your point, it is probably going to be later this year. House Republicans have to align on a number of key sticking points. So, we have passage somewhere on the third or fourth quarter of 2025.But when we think about the fiscal picture, aside from the deficit and the macro impacts, a really key component is going to be what these tax changes mean for the equity market. The extension of certain tax policies will matter more for certain sectors versus others. For example, we know that extending some of the corporate provisions, aside from the lower rate, will have an impact across domestically oriented industries like industrials, healthcare, and telecom.But Andrew, to bring it back to this discussion, I want to think a little bit more about how we can loop in our expectations for the equity market and map that to certain dollar outcomes. How do you think that this as a barometer has changed, if at all, from Trump's first term?Andrew Watrous: Yeah, currency strategists like me love talking about yield differentials. But from 2016 to 2018, the U.S. dollar did not trade in line with yield differentials. Instead, in the initial years of President Trump's first term, equities were a much better barometer than interest rates for where the U.S. dollar would go.After President Trump was elected in 2016, U.S. stocks really outperformed stocks in the rest of the world, and the U.S. dollar went up. Then in 2017, stocks outside the U.S. caught up to the move in U.S. stocks, and the U.S. dollar fell. Then in 2018, all that went into reverse, and U.S. stocks started outperforming again, and the U.S. dollar went up.So, what we've been seeing in stocks today really echoes 2017, not 2018. Stocks outside the U.S. have caught up to the post election rise in U.S. stocks. And so, just like it did in 2017, we think that the U.S. dollar will decline to catch up to that move in relative stock indices.Ariana Salvatore: Finally, Andrew, we already discussed the U.S. dollar negative drivers from 2017. But what happened to these drivers the following year in 2018? And is that any indication for what might happen in 2026?Andrew Watrous: So 2018, as you mentioned, does offer a blueprint for how the U.S. dollar could go up. So, for example, if trade tensions evolve in a direction where our economists would have to significantly downwardly revise their global growth forecasts, then the U.S. dollar could start to look more attractive as a safe haven. And in 2018, there was a big rise in long-end Treasury yields. That's not what we're calling for; but if that were to happen, then the U.S. dollar could catch a bid.Ariana Salvatore: Andrew, thanks for taking the time to talk.Andrew Watrous: Great speaking with you, Ariana.Ariana Salvatore: And thanks for listening. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today.

New Tax Relief? What Trump's Tax Changes Mean For Your Business

Play Episode Listen Later Feb 26, 2025 19:33

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The Menu Gets SALTier: State and Local Taxes in TCJA Negotiations

Brownstein Podcast Series

Play Episode Listen Later Feb 24, 2025 20:08

Tax law allows those who itemize their returns to deduct certain state and local taxes, this is known as the SALT deduction. The provision was capped for individuals regardless of marital status at $10,000 by the Tax Cuts and Jobs Act as a revenue raiser, upsetting those in high-tax states like New York, New Jersey and California. With current razor thin margins in Congress and members of both parties representing these areas, our tax team dives into how the House and Senate may negotiate the caps and how they could be extended to corporations in 2025 tax legislation.

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Who Might Benefit From Trump's Tax Policy Proposals?

Play Episode Listen Later Feb 10, 2025 7:47

Global Head of Fixed Income and Public Policy Research Michael Zezas and Head of Global Evaluation, Accounting and Tax Todd Castagno discuss the market and economic implications of proposed tax extensions and tax cuts.----- Listener Survey -----Complete a short listener survey at http://www.morganstanley.com/podcast-survey and help us make the podcast even more valuable for you. For every survey completed, Morgan Stanley will donate $25 to the Feeding America® organization to support their important work.© 2025 Morgan Stanley. All Rights Reserved. CRC#4174856 02/2025----- Transcript -----Before we get into today's episode, the team behind Thoughts on the Market wants your thoughts, and your input. Fill out our listener survey and help us make this podcast even more valuable for you. The link is in the show notes, and you'll hear it at the end of the episode. Plus, help us help the Feeding America organization. For every survey completed, Morgan Stanley will donate $25 toward their important work.Thanks for your time and support. On to the show.Michael Zezas: Welcome to Thoughts on the Market. I'm Michael Zezas, Morgan Stanley's Global Head of Fixed Income Research and Public Policy Strategy.Todd Castagno: And I'm Todd Castagno, Head of Global Evaluation, Accounting and Tax.Michael Zezas: Today, we'll focus on taxes under the new Trump administration.It's Monday, February 10th, at 10am in New York.Recently, at the annual meeting of the World Economic Forum in Davos, President Trump stated his administration will pass the largest tax cut in American history, including substantial tax cuts for workers and families. He was short on the details, but tax policies were a significant focus of his election campaign.Todd, can you give us a better sense of the tax cuts that Trump's been vocal about so far?Todd Castagno: Well, there's tax cuts and tax extensions. So, I think that's an important place to set the baseline. The Tax Cuts and Jobs Act (TCJA), under his first administration, starts to expire in 2025. And so, what we view is, the most likelihood is, an extension of those policies going forward. However, there's some new ideas, some new contours as well. So, for instance, a lower corporate rate that gets you in the 15 per cent ballpark can be through domestic tax credits, new incentives.I think there's other items on the individual side of the code that could be explored as well. But we also have to kind of step back and creating new policy is very challenging. So again, that baseline is an extension of kind of the tax world we live in today.So, Michael, looking at the broader macro picture and from conversations with our economist, how would these tax cuts impact GDP and macro in general?Michael Zezas: Well, if you're talking about extension of current policy, which is most of our expectation about what happens with taxes at the end of the year, the way our economists have been looking at this is to say that there's no net new impulse for households or companies to behave differently.That might be true on a sector-by-sector basis, but in the aggregate for the economy, there's no reason to look at this policy and think that it is going to provide a definitive uplift to the growth forecast that they have for 2026. Now, there may be some other provisions that could add in there that are incremental that we'd have to consider.But still, they would probably take time to play out or their measurable impact would be very hard to define. Things like raising the cap on the state and local tax deduction, that tends to impact higher income households who already aren't constrained from a spending perspective. And things like a domestic manufacturing tax credit for companies, that could take several years to play out before it actually manifests into spending.Todd Castagno: And you're kind of seeing that with the prior administration's tax law, the Inflation Reduction Act. A lot of this takes years in order to actually play through the economy. So that's something that investors should consider.Michael Zezas: Yeah, these things certainly take time; and you know back in 2018 it had been a long ambition, particularly of Republican lawmakers, to reduce the corporate tax rate. They succeeded in doing that, getting it down to 21 per cent in Trump's first term. Now, Trump's talked about getting corporate tax rates lower again here. If he's able to do that, how do you think he would do that? And would that affect how you're thinking about investment and hiring?Todd Castagno: So, there's the corporate rate itself, and it's at 21 per cent currently. There is a view to change that rate, lower it. However, there's other ways you can reduce that effective tax burden through what we've just discussed. So enhanced corporate deductions, timing differences, companies can benefit from a tax system that ultimately gets them a lower effective rate, even if the corporate rate doesn't move much.Michael Zezas: And so, what sorts of companies and what sorts of sectors of the market would benefit the most from that type of reduction in the corporate tax burden?Todd Castagno: So, if you think they're mosaic of all these items, it's going to accrue to domestic companies. That might sound kind of obvious, but if you look at our economy, we have large multinationals and we have domestic companies and we have small businesses. The policies that are being articulated, I think, mostly orient towards domestic companies, industrials, for instance, R&D incentives, again powering our AI plants, energy, et cetera.Michael Zezas: Got it. And is there any read through on if a company does better under this policy – if they're big relative to being small?Todd Castagno: There are a lot of small business elements as well. So, I mentioned that timing difference, being able to deduct a piece of machinery day one versus over seven years. So, there's a lot of benefits that are not in the rate itself that can accrue through smaller businesses.Michael Zezas: YAnd what about for individual taxpayers, particularly the middle class? What particular tax cuts are on the table there?Todd Castagno: So, first and foremost is the child tax care credit. So, it's current policy, but after COVID, it was enhanced. A higher dollar amount, different mechanism for receiving funds. And so, there is bipartisan support and President Trump as well, bringing back a version of an enhanced credit. Now, the policy is a little bit tricky, but I would say there's very good odds that that comes back. You know, you mentioned the state and local tax deduction, right? The politics are also tricky, but there could be a rate of change where that reverts back to pre-TCJA.But one of the things, Michael, is all these policies are very expensive. So, I'm just curious, in your mind, how do we balance the price tag versus the outcome?Michael Zezas: Well, I think the main constraint here to consider is that Republicans have a very slim majority in the House of Representatives and the Senate, and they're unlikely to get Democratic representatives crossing the aisle to vote with them on a tax package this large. So, they'll really need complete consensus on whatever tax items they extend and the deficit impact that it causes this is the type of thing that ultimately will constrain the package to be smaller than perhaps some of the president's stated ambitions.So, for example, items like making the interest payments on auto loans tax deductible, we think there might not be sufficient support for that and the budget costs that it would create. So ultimately, we think you get back to a package that's mostly about extending current cuts, adding in a couple more items like that domestic manufacturing tax credit, which is also very closely tied to Republicans larger trade ambition. And you might also see Republicans do some things to reduce the price tag, like, for example, only extend the tax cuts for a few years, as opposed to five or 10 years.Todd Castagno: Right.Michael Zezas: Todd, thanks for taking the time to talk.Todd Castagno: Great speaking with you, Mike.Thanks for listening. If you enjoy the podcast, help us make it even more valuable for you. Share your feedback on the show at morganstanley.com/podcast-survey or head to the episode notes for survey link.The proceeding content is informational only and based on information available when created. It is not an offer or a solicitation nor is it tax or legal advice. It does not consider your financial circumstances and objectives and may not be suitable for you.

Managing Fiscal Policy Uncertainty Under Trump 2.0

The Paychex Business Series Podcast with Gene Marks - Coronavirus

Play Episode Listen Later Jan 30, 2025 9:05

Our Global Head of Fixed Income and Public Policy Research, Michael Zezas, and Global Head of Macro Strategy, Matt Hornbach, discuss how the Trump administration's fiscal policies could impact Treasuries markets.----- Transcript -----Michael Zezas: Welcome to Thoughts on the Market. I'm Michael Zezas, Morgan Stanley's Global Head of Fixed Income and Public Policy Research.Matthew Hornbach: And I'm Matthew Hornbach, Global Head of Macro Strategy.Michael Zezas: Today, we'll talk about U.S. fiscal policy expectations under the new Trump administration and the path for U.S. Treasury yields.It's Thursday, January 30th at 10am in New York.Fiscal policy is one of the four key channels that have a major impact on markets. And I want to get into the outlook for the broader path for fiscal policy under the new administration. But Matt, let's start with your initial take on this week's FOMC meeting.Matthew Hornbach: So, investors came into the FOMC meeting this week with a view that they were going to hear a message from Chair Powell that sounded very similar to the message they heard from him in December. And I think that was largely the outcome. In other words, investors got what they expected out of this FOMC meeting. What did it say about the chance the Fed would lower interest rates again as soon as the March FOMC meeting? I think in that respect investors walked away with the message that the Fed's baseline view for the path of monetary policy probably did not include a reduction of the policy rate at the March FOMC meeting. But that there was a lot of data to take on board between now and that meeting. And, of course, the Fed as ever remains data dependent.All of that said, the year ahead for markets will rely on more than just Fed policy. Fiscal policy may feature just as prominently. But during the first week of Trump's presidency, we didn't get much signaling around the president's fiscal policy intentions. There are plenty of key issues to discuss as we anticipate more details from the new administration.So, Mike, to set the scene here. What is the government's budget baseline at the start of Trump's second term? And what are the president's priorities in terms of fiscal policies?Michael Zezas: You know, I think the real big variable here is the set of tax cuts that expire at the end of 2025. These were tax cuts originally passed in President Trump's first term. And if they're allowed to expire, then the budget baseline would show that the deficit would be about $100 billion smaller next year.If instead the tax cuts are extended and then President Trump were able to get a couple more items on top of that – say, for example, lifting the cap on state and local tax deduction and creating a domestic manufacturing tax credit; two things that we think are well within the consensus of Republicans, even with their slim majority – then the deficit impact swings from a contraction to something like a couple hundred billion dollars of deficit expansion next year. So, there's meaningful variance there.And Matt, we've got 10-year Treasury yields hovering near highs that we haven't seen since before the global financial crisis around 10 years ago. And yields are up around a full percentage point since September. So, what's going on here and to what extent is the debate on the deficit influential?Matthew Hornbach: Well, I think we have to consider a couple of factors. The deficit certainly being one of them, but people have been discussing deficits for a long time now. It's certainly news to no one that the deficit has grown quite substantially over the past several years. And most investors expect that the deficit will continue to grow. So, concerns around the deficit are definitely a factor and in particular how those deficits create more government bonds supply. The U.S. Treasury, of course, is in charge of determining exactly how much government bond supply ends up hitting the marketplace.But it's important to note that the incoming U.S. Treasury secretary has been on the record as suggesting that lower deficits relative to the size of the economy are desired. Taking the deficit to GDP ratio from its current 7 per cent to 3 per cent over the next four years is desirable, according to the incoming Treasury secretary. So, I think it is far from conclusive that deficits are only heading in one direction. They may very well stabilize, and investors will eventually need to come to terms with that possibility.The other factor I think that's going on in the Treasury market today relates to the calendar. Effectively we have just gone through the end of the year. It's typically a time when investors pull back from active investment, but not every investor pulls back from actively investing in the market. And in particular, there is a consortium of investors that trade with more of a momentum bias that saw yields moving higher and invested in that direction; that, of course, exacerbated the move.And of course, this was all occurring ahead of a very important event, which was the inauguration of President Trump. There was a lot of concern amongst investors about exactly what the executive orders would entail for key issues like trade policy. And so there was, I think, a buyer's strike in the government bond market really until we got past the inauguration.So, Mike, with that background, can you help investors understand the process by which legislation and its deficit impact will be decided? Are there signposts to pay attention to? Perhaps people and processes to watch?Michael Zezas: Yeah, so the starting point here is Republicans have very slim majorities in the House of Representatives and the Senate. And extending these tax cuts in the way Republicans want to do it probably means they won't get enough Democratic votes to cross the aisle in the Senate to avoid a filibuster.So, you have to use this process called budget reconciliation to pass things with a simple majority. That's important because the first step here is determining how much of an expected deficit expansion that Republicans are willing to accept. So, procedurally then, what you can expect from here, is the House of Representatives take the first step – probably by the end of May. And then the Senate will decide what level of deficit expansion they're comfortable with – which then means really in the fall we'll find out what tax provisions are in, which ones are out, and then ultimately what the budget impact would be in 2026.But because of that, it means that between here and the fall, many different fiscal outcomes will seem very likely, even if ultimately our base case, which is an extension of the TCJA with a couple of extra provisions, is what actually comes true.And given that, Matt, would you say that this type of confusion in the near term might also translate into some variance in Treasury yields along the way to ultimately what you think the end point for the year is, which is lower yields from here?Matthew Hornbach: Absolutely. There's such a focus amongst investors on the fiscal policy outlook that any volatility in the negotiation process will almost certainly show up in Treasury yields over time.Michael Zezas: Got it.Matthew Hornbach: On that note, Mike, one more question, if I may. Could you walk me through the important upcoming dates for Congress that could shed light on the willingness or ability to expand the deficit further?Michael Zezas: Yeah, so I'd pay attention to this March 14th deadline for extending stopgap appropriations because there will likely be a lot of chatter amongst Congressional Republicans about fiscal expectations. And it's the type of thing that could feed into some of the volatility and perception that you talked about, which might move markets in the meantime.I still think most of the signal we have to wait for here is around the reconciliation process, around what the Senate might say over the summer. And then probably most importantly, the negotiation in the fall about ultimately what taxes will be passed, what that deficit impact will be. And then there's this other variable around tariffs, which can also create an offsetting impact on any deficit expansion.So still a lot to play for despite that near term deadline, which might give us a little bit of information and might influence markets on a near term basis.Matthew Hornbach: Great. Well Mike, thanks for taking the time to talk.Michael Zezas: Matt, great speaking with you. And as a reminder, if you enjoy Thoughts on the Market, please take a moment to rate and review us wherever you listen and share Thoughts on the Market with a friend or colleague today.

Paychex's Stephen Dombroski: Decoding Small Business Tax Changes for 2025

Play Episode Listen Later Jan 28, 2025 18:25

Taxes are changing — what does that mean for your business? On this week's episode of Paychex THRIVE, Gene Marks chats with Stephen Dombroski, Senior Compliance Manager at Paychex, to break down the critical tax changes coming as the Tax Cuts and Jobs Act approaches its expiration. From bonus depreciation to the Section 199A deduction (and everything in between), Stephen shares what these changes might mean for your business, your employees, and even your personal finances. Whether you're planning capital investments, thinking about R&D credits, or just trying to stay ahead of tax changes, this episode is packed with expert advice to help you prepare. Topics include: 00:00 – Episode preview and welcome 01:03 – Discussion on Tax Cuts and Jobs Act (TCJA) 02:20 – Provisions of TCJA 04:42 – Impact of fluctuating TCJA depreciation policies 06:35 – Potential bipartisan tax deal and its outcomes 08:29 – Individual income tax changes 10:36 – Future tax changes and employer considerations 12:37 – Employee Retention Credit discussion 14:18 – Implications of possible changes to estates taxes and the Work Opportunity Tax Credit 15:34 – Advice on preparing for tax changes 17:39 – Wrap up and thank you 14 ways to save on small business taxes in 2025: https://bit.ly/3CoMNgy Regulatory changes every business should know and prepare for this year: https://bit.ly/4gfFWE6 DISCLAIMER: The information presented in this podcast, and that is further provided by the presenter, should not be considered legal or accounting advice, and should not substitute for legal, accounting, or other professional advice in which the facts and circumstances may warrant. We encourage you to consult legal counsel as it pertains to your own unique situation(s) and/or with any specific legal questions you may have.

America's Roundtable with Gerard Gibert | President Donald Trump's Key Priorities | Urgency on Tax Reform | American Leadership on the Global Front

Brownstein Podcast Series

Play Episode Listen Later Jan 26, 2025 26:25

Join America's Roundtable (https://americasrt.com/) radio co-hosts Natasha Srdoc and Joel Anand Samy with host Gerard Gibert, an extraordinary entrepreneur and business leader. Mr. Gibert is also the host of Middays with Gerard on SuperTalk Mississippi . The timely and relevant conversation on America's Roundtable with Gerard Gibert focuses on the issues impacting Americans including the urgency to provide certainty and clarity to business leaders and entrepreneurs in the area of taxation, by making permanent Tax Cuts and Jobs Act which otherwise expires in 2025. In this insightful episode, America's Roundtable conversation with Gerard Gibert centers on: ✅ President Donald J. Trump's first week as America's 47th president and his administration's key priorities ✅ A bold tax reform statement ✅ Saudi Arabia's $600 billion pledge to invest in America's economy ✅ President Trump's executive order to ensure U.S. global leadership in artificial intelligence In 1986, Gerard Gibert founded Venture Technologies, a technology and cloud services provider. As CEO of Venture, Gibert engineered numerous mergers and acquisitions of strategic targets, catapulting Venture to national prominence as a technology solutions provider. Initially funded at $189,000, Venture was sold for $92 million in 2019. Mr. Gibert serves on a variety of boards dedicated to growing Mississippi's economy. That list includes the Madison County Economic Development Authority, Madison County Business League and Foundation, Innovate Mississippi, Empower Mississippi, and the Mississippi Lottery Corporation. Gerard Gibert also serves on the executive advisory board of International Leaders Summit and is co-chair of the U.S.-based think tank's American Leadership Task Force advancing principled reforms. americasrt.com (https://americasrt.com/) https://ileaderssummit.org/ | https://jerusalemleaderssummit.com/ America's Roundtable on Apple Podcasts: https://podcasts.apple.com/us/podcast/americas-roundtable/id1518878472 X: @grgibert @ileaderssummit @NatashaSrdoc @JoelAnandUSA @supertalk America's Roundtable is co-hosted by Natasha Srdoc and Joel Anand Samy, co-founders of International Leaders Summit and the Jerusalem Leaders Summit. America's Roundtable (https://americasrt.com/) radio program - a strategic initiative of International Leaders Summit, focuses on America's economy, healthcare reform, rule of law, security and trade, and its strategic partnership with rule of law nations around the world. The radio program features high-ranking US administration officials, cabinet members, members of Congress, state government officials, distinguished diplomats, business and media leaders and influential thinkers from around the world. Tune into America's Roundtable Radio program from Washington, DC via live streaming on Saturday mornings via 65 radio stations at 7:30 A.M. (ET) on Lanser Broadcasting Corporation covering the Michigan and the Midwest market, and at 7:30 A.M. (CT) on SuperTalk Mississippi — SuperTalk.FM reaching listeners in every county within the State of Mississippi, and neighboring states in the South including Alabama, Arkansas, Louisiana and Tennessee. Listen to America's Roundtable on digital platforms including Apple Podcasts, Spotify, Amazon, Google and other key online platforms. Listen live, Saturdays at 7:30 A.M. (CT) on SuperTalk | https://www.supertalk.fm

New Year, New Tax Cuts: Looking Beyond TCJA Extenders in 2025

Play Episode Listen Later Jan 22, 2025 18:34

While on the campaign trail, President-elect Trump didn't just promise to extend the tax cuts he passed with the Tax Cuts and Jobs Act (TCJA) in 2017, he promised additional tax breaks for Americans. Ranging from the removal of taxes on tips and overtime for workers to reductions in corporate rates for businesses, tax legislation in the next administration will have wide-reaching effects. Our tax policy team breaks down these proposals and discusses their likelihood of inclusion in reconciliation legislation.

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Will Your Taxes Go Up? Best- and Worst-case Scenarios for Tax Reform in 2025

The Deduction

Play Episode Listen Later Jan 22, 2025 20:02

What will the future of tax policy look like? In this episode, we dive into the critical challenges and opportunities looming on the horizon, especially with major tax cuts set to expire, which could increase taxes for 62 percent of filers. Kyle Hulehan and Erica York are joined by Daniel Bunn, President and CEO of the Tax Foundation. Together, they explore what needs to happen in tax policy this year to avert a fiscal crisis, discussing the best- and worst-case scenarios for taxpayers. They also highlight how this year can serve as a vital reset for lawmakers and what key policies are at the top of Daniel's wish list.Tax Calculator: How the TCJA's Expiration Will Affect You See moreExpiring TCJA Tax Provisions in 2026 Would Produce Substantial Tax Hike across the US See moreOptions for Navigating the 2025 Tax Cuts and Jobs Act Expirations See moreA Tax Reform Plan for Growth and Opportunity: Details & Analysis See moreSupport the showFollow us!https://twitter.com/TaxFoundationhttps://twitter.com/deductionpodSupport the show

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Protect Prosperity: Fighting for Tax Reform and Economic Freedom

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Play Episode Listen Later Jan 16, 2025 24:49

As tax cuts from the Tax Cuts and Jobs Act (TCJA) face expiration, Americans for Prosperity (AFP) is launching the "Protect Prosperity" campaign to ensure economic freedom for all Americans. In this episode, new host David From speaks with Ken Strang, Managing Director for AFP, about the critical importance of extending these tax reforms. Learn how the TCJA impacted small businesses, created jobs, and saved American families up to $1,500 annually. Hear inspiring stories of entrepreneurs who thrived thanks to these policies and discover how AFP's grassroots efforts, from door-knocking to innovative local events, are mobilizing citizens to fight for economic opportunity. This episode also highlights the consequences of Bidenomics, rising costs, and the urgent need for pro-growth tax reform to help families and businesses rebuild their American Dream. Whether you're a concerned taxpayer or small business owner, find out how you can get involved and make your voice heard. Visit ProtectProsperity.com to join the fight for a brighter economic future.

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Legal News for Thurs 1/16 - CA Wildfire Lawsuits Against Utilities, Pam Bondi's AG Nomination, DOJ Independence, and Retirement Account Tax Advocates Should Lay Low

Minimum Competence

Play Episode Listen Later Jan 16, 2025 6:00

This Day in Legal History: Pendleton Civil Service Reform ActOn January 16, 1883, the U.S. Congress enacted the Pendleton Civil Service Reform Act, a landmark piece of legislation that fundamentally transformed federal employment practices. The act was a response to widespread corruption and inefficiency in the government, fueled by the patronage or "spoils" system, which awarded jobs based on political loyalty rather than competence. Signed into law by President Chester A. Arthur, the Pendleton Act marked a critical shift toward merit-based hiring and promotion within the federal workforce.The law initially applied to only about 10% of federal jobs, requiring competitive examinations to determine qualifications. However, it granted the president authority to expand the classified service, allowing successive administrations to broaden its scope. The act also established the Civil Service Commission, the first federal agency tasked with overseeing adherence to these new standards of fairness and efficiency.This reform was catalyzed by public outcry following the assassination of President James A. Garfield in 1881 by a disgruntled office seeker. The tragedy underscored the dangers of a system rife with favoritism and incompetence, galvanizing bipartisan support for change. Over time, the principles of the Pendleton Act have become cornerstones of American civil service, contributing to the professionalization and stability of the federal government.By curbing patronage and introducing accountability, the act helped restore public trust in government operations. It also served as a model for state and local reforms and influenced broader discussions about the role of expertise in public administration. Today, the Pendleton Act is recognized as a foundational moment in the evolution of modern governance in the United States, laying the groundwork for a more impartial and effective civil service system.Victims of recent Los Angeles wildfires are leveraging California's unique legal doctrine of "inverse condemnation" to seek damages from Southern California Edison (SCE), even if the utility was not negligent. This doctrine, traditionally used against government entities for property damage, has been extended to utilities, making them liable for property damage caused during public service operations, regardless of fault. SCE is facing numerous lawsuits over the Eaton Fire, which destroyed thousands of structures and caused at least 24 deaths. Plaintiffs claim the fire originated near SCE's high-voltage transmission towers, although the company reports no operational anomalies on its lines before or during the fire.California law does not require plaintiffs to prove negligence for property damage claims under inverse condemnation. However, proving negligence could enable claims for personal injuries and wrongful death. The lawsuits cite substantial economic losses and damages exceeding insurance coverage. To mitigate financial impacts, a $21 billion state wildfire insurance fund is available, capping SCE's exposure at $3.9 billion.These cases, expected to take years to resolve, highlight the escalating legal and financial consequences for utilities in wildfire-prone areas.California utility faces billions in claims for fire damage even if it did nothing wrong | ReutersPam Bondi, nominated by Donald Trump for U.S. attorney general, assured the Senate Judiciary Committee that she would not politicize the Justice Department, but refused to rule out investigating Trump critics. Bondi, who previously served as Florida's attorney general and defended Trump during his 2019 impeachment trial, emphasized her focus on issues like violent crime and human trafficking while acknowledging she would evaluate investigations and potential pardons on a case-by-case basis.Democratic lawmakers expressed concerns about her independence, referencing Trump's pledge to target his adversaries and the dismissal of two past attorneys general who defied him. Bondi criticized Special Counsel Jack Smith's investigations into Trump as partisan but claimed she would maintain fairness. Republicans praised Bondi, urging her to restore the Justice Department's reputation and combat crime and border issues. Democrats questioned her involvement in promoting Trump's election fraud claims and her support for FBI director nominee Kash Patel, who has been linked to controversial conspiracy theories. Bondi acknowledged Biden's 2020 victory but suggested irregularities in Pennsylvania. The committee continues vetting other controversial cabinet nominees ahead of Trump's upcoming inauguration.Trump nominee Pam Bondi vows independence, but won't rule out probes of Trump critics | ReutersIn my column for Bloomberg this week I focus on the strategic risks of advocating for retirement account tax reforms during the anticipated extension of the Tax Cuts and Jobs Act (TCJA) provisions under a new Trump administration. Extending these provisions, a top priority, will cost an estimated $4.6 trillion over the next decade, creating a politically and fiscally sensitive environment where other tax code changes could face heightened scrutiny. The 403(b) retirement accounts, designed for public employees and nonprofit workers, are particularly vulnerable because of their association with significant tax expenditures, which totaled over $300 billion in 2022 and are projected to exceed $2 trillion by 2026. Advocates for reform in areas like expanding 403(b) investment options should avoid pushing these changes now, as drawing attention to retirement accounts could lead to cuts framed as cost-saving measures. History shows that retirement savings provisions are not immune to political pressure, with past examples including the TCJA's elimination of Roth IRA recharacterizations and narrowly avoided cuts to 401(k) benefits. In this high-stakes fiscal landscape, strategic patience is essential. Advocates are advised to focus on preserving existing provisions rather than risking unintended consequences by pursuing reform during an unfavorable political moment.Retirement Account Reformists Should Wait to Push Tax Code Changes This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

Alan Cole on Tariffs and the Coming Fight over TCJA Renewal

Simply Put

Play Episode Listen Later Jan 10, 2025 47:42

With slim majorities in the House and Senate, Republicans hope to narrow the fiscal deficit and extend many of the tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA). A handful of fiscal hawks and the Senate's legislative rules could limit the GOP's ability to accomplish renewal of the TCJA's biggest provisions. President-elect Trump also campaigned extensively on raising tariffs to increase revenues and protect domestic industry. In this episode, we talk with Alan Cole, Senior Economist with the Tax Foundation's Center for Federal Tax Policy, about the Senate's budget reconciliation process, the most important aspects of the TCJA up for renewal this year, and the revenue impacts of tariffs.

Tax Cuts and Jobs Act: Protecting Your Pocketbook and America's Economic Growth

america discover americans congress protecting prosperity passed tax cuts economic growth jobs act pocketbook tcja jobs act tcja

Play Episode Listen Later Jan 7, 2025 27:37

Join American Potential host David From as he dives into a critical topic with Patrick Fleer, a tax policy fellow at Americans for Prosperity: the far-reaching impacts of the Tax Cuts and Jobs Act (TCJA) and its looming expiration in 2025. Passed in 2017, the TCJA delivered tax relief for individuals and businesses, incentivized investment, and simplified the tax code. But what happens if it expires without reauthorization? Patrick explains how tax policy affects everyday decisions, from saving for the future to investing in tools for tradespeople, and why a productive economy benefits all Americans. They discuss the broader economic impact of delayed consumption, the importance of a simplified tax code, and how targeted reforms like the TCJA can foster economic freedom and opportunity. Discover the real-world effects of tax policies on wages, businesses, and families. Learn why Congress must act to renew the TCJA and explore ways to take it even further, creating a tax system that empowers everyone. With economic freedom at stake, staying informed and engaged is more important than ever. Tune in to learn how good tax policies can unleash potential, support everyday Americans, and drive prosperity for all.

What It Means for Taxes as the New Congress Gets Busy

Talking Tax

Play Episode Listen Later Dec 30, 2024 14:46

Jan. 3 marks the beginning of the next Congress, where Republicans will lead both chambers and control the White House. Democrats being out of power has big implications for tax policy, as GOP lawmakers heading into the new year debate what to renew from the 2017 GOP tax law, known as the Tax Cuts and Jobs Act. The TCJA was passed with no votes from Democrats and benefits skewed toward the wealthy and corporations. Incoming GOP leaders have proposed breaking their top priorities into two bills and moving them through Congress using the reconciliation process. The first would jump-start President-elect Donald Trump's priorities on immigration and gas drilling, and the second would include tax and other legislative priorities. Republicans say moving tax legislation to later in the year would give them more time to decide what to do about many of the law's individual provisions that expire at the end of 2025. They also will have to decide what Trump campaign promises to include. On this episode of Talking Tax, Bloomberg Tax reporters Chris Cioffi, Zach Cohen, and Lauren Vella discuss what to expect in the 2025 tax fight, and the policy issues that likely will define the debate. Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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America's Roundtable with Gerard Gibert | Urgency to Advance Principled Reforms in America | Cut Government Spending | Tax Reform | Healthcare Reform

Retire With Purpose: The Retirement Podcast

Play Episode Listen Later Dec 21, 2024 29:12

Join America's Roundtable (https://americasrt.com/) radio co-hosts Natasha Srdoc and Joel Anand Samy with host Gerard Gibert, an extraordinary entrepreneur and business leader. Mr. Gibert is also the host of Middays with Gerard on SuperTalk Mississippi . The timely and relevant conversation on America's Roundtable with Gerard Gibert focuses on the issues impacting Americans including the urgency to rein in government spending and the concerns that Congress has failed to put forward a balanced budget. Gerard Gibert also highlights the importance of addressing tax reform and healthcare reform. The conversation on America's Roundtable tackles the ways in which Congress, the incoming Trump administration joined by engaged citizens and taxpayers can address fraud, waste and abuse impacting the Department of Defense (DOD). "In fiscal year 2024, DOD underwent its seventh financial statement audit, and again received a disclaimer of opinion. For the seventh time consecutively, auditors were unable to “obtain sufficient, appropriate audit evidence to support an opinion.” GAO continues to designate DOD's financial management and business systems modernization efforts as high risk because of pervasive deficiencies in the department's business processes, internal controls, financial reporting, and financial management systems." — House Committee on Oversight and Accountability, December 11, 2024 In 1986, Gerard Gibert founded Venture Technologies, a technology and cloud services provider. As CEO of Venture, Gibert engineered numerous mergers and acquisitions of strategic targets, catapulting Venture to national prominence as a technology solutions provider. Initially funded at $189,000, Venture was sold for $92 million in 2019. Mr. Gibert serves on a variety of boards dedicated to growing Mississippi's economy. That list includes the Madison County Economic Development Authority, Madison County Business League and Foundation, Innovate Mississippi, Empower Mississippi, and the Mississippi Lottery Corporation. Gerard Gibert also serves on the executive advisory board of International Leaders Summit and is co-chair of the U.S.-based think tank's American Leadership Task Force advancing principled reforms. americasrt.com (https://americasrt.com/) https://ileaderssummit.org/ | https://jerusalemleaderssummit.com/ America's Roundtable on Apple Podcasts: https://podcasts.apple.com/us/podcast/americas-roundtable/id1518878472 X: @grgibert @ileaderssummit @NatashaSrdoc @JoelAnandUSA @supertalk America's Roundtable is co-hosted by Natasha Srdoc and Joel Anand Samy, co-founders of International Leaders Summit and the Jerusalem Leaders Summit. America's Roundtable (https://americasrt.com/) radio program - a strategic initiative of International Leaders Summit, focuses on America's economy, healthcare reform, rule of law, security and trade, and its strategic partnership with rule of law nations around the world. The radio program features high-ranking US administration officials, cabinet members, members of Congress, state government officials, distinguished diplomats, business and media leaders and influential thinkers from around the world. Tune into America's Roundtable Radio program from Washington, DC via live streaming on Saturday mornings via 65 radio stations at 7:30 A.M. (ET) on Lanser Broadcasting Corporation covering the Michigan and the Midwest market, and at 7:30 A.M. (CT) on SuperTalk Mississippi — SuperTalk.FM reaching listeners in every county within the State of Mississippi, and neighboring states in the South including Alabama, Arkansas, Louisiana and Tennessee. Listen to America's Roundtable on digital platforms including Apple Podcasts, Spotify, Amazon, Google and other key online platforms. Listen live, Saturdays at 7:30 A.M. (CT) on SuperTalk | https://www.supertalk.fm

473: Retirement Tax Planning: Exploring the Impact of a Republican Trifecta on Your Taxes and Bottom Line

Play Episode Listen Later Dec 13, 2024 30:10

With the 2024 presidential election now behind us, what does that mean for the future of tax policies, tax rates, and their impact on your lifelong savings? In this episode, we discuss: A brief history of tax policy changes Impact of the Tax Cuts and Jobs Act (TCJA) Potential results of the set TCJA 2026 expiration State and local taxes (SALT) cap changes Today's article is from Kitces.com titled, 2024 Election: Evaluating The Impact Of A (Likely) Republican Trifecta On The TCJA Sunset And Tax Planning. Listen in as Founder and CEO of Howard Bailey Financial, Casey Weade, breaks down the article and provides thoughtful insights and advice on how it applies to your unique financial situation. Our Market Outlook Webinar is live! Visit https://bit.ly/4bmHkUb to register. Show Notes: RetireWithPurpose.com/473 Rate & Review the Podcast: RetireWithPurpose.com/review

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Tax talk 2025 — Policies, provisions and perspectives

Tax Section Odyssey

Play Episode Listen Later Dec 13, 2024 25:22

Note: This podcast episode was recorded Nov. 20, 2024, and since then, the U.S. House of Representatives races have been called, giving the Republicans 220 congressional members and the Democrats 215. This balance could change depending on potential special elections if some members of the House are appointed to positions within President-Elect Trump's administration. In this episode of the AICPA's Tax Section Odyssey podcast, Kasey Pittman, CPA, MST, Director of Tax Policy — Baker Tilly US LLP, discusses potential upcoming tax legislation for 2025, focusing on the complexities and challenges of extending the Tax Cuts and Jobs Act (TCJA) and other tax provisions. What you'll learn from this episode: The potential complexities and challenges of extending provisions of the TCJA and other tax legislation. The implications of a unified government and the reconciliation process for passing tax legislation. The financial constraints posed by the national debt and the importance of managing the deficit. The influence of individual policymakers and the importance of state and local tax (SALT) deductions. Potential revenue raisers like tariffs and ending the employee retention credit early, and their impact on the overall tax legislation. AICPA resources Planning for tax changes — CPAs need to not only brace for tax law changes such as the TCJA and expiring provisions but also be proactive in planning for them. Tax advocacy — Advocacy is a core element of our purpose and value proposition. It is a strong mechanism for promoting trust and confidence in the CPA and CGMA credentials around the world. Transcript April Walker: Hello, everyone, and welcome back to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, a lead manager from the tax section, and I'm here today with Kasey Pittman. Kasey is the director of Tax Policy with Baker Tilly's National Tax Office. Welcome, Kasey. Kasey Pittman: Thank you for having me. April Walker: I thought we'd spend a few minutes today setting expectations for tax legislation for 2025. First, a little bit of a spoiler, tax legislation is likely, right, but what it will actually entail is probably a lot more complicated than just a straight status quo extension of TCJA. Kasey, let's set the stage a little bit and talk about what we know about the makeup of the government and what that will mean for upcoming legislation. Kasey Pittman: I think going into the election, the vast majority of people assumed we were going to wind up in some divided government. We knew it was very likely that Republicans would capture the Senate. The math there was not very good for Democrats, just in terms of how many seats were up, and one of the Democratic-turned-independent retiring senators from a deep red state was almost a certainty to flip. I think the general thinking was that either Democrats would capture the White House or the House, and neither of those things came to fruition. We are sitting here in the 2024 election was a Republican sweep. We've done a lot of worrying about things that we can let go of, and I think probably we'll touch on that a little bit later in the podcast. But the margins aren't very big. Trump captured the White House actually by a good margin in terms of both electoral votes and total votes in the country. It looks like Senate Republicans will have the majority with a 53-47 split between Republicans and Democrats. The house is currently unknown. We know that the House has captured 218, and that's what you need for the majority. There's 435 seats. 218 is literally a one seat majority. There are five races outstanding, and probably threeish, maybe four of those are likely to go Republican. We're just waiting on final vote counts. In the House, we're looking at a few vote margin, in the Senate, we're looking at a few vote margin, and that can make legislating really difficult. One of the themes we touch on here as we go through is reconciliation. When you have a unified government, and a unified government is one where one party has both chambers in Congress, and the White House, which is what we're going into in 2025, there's this process that you can use for certain types of legislation, fiscal legislation called reconciliation. What reconciliation does is it allows you to overcome the filibuster in the Senate. You actually only need a simple majority, like 51 votes in the Senate to pass a bill, but anybody can hold up a bill with a filibuster, and you need 60 votes to end debate and force the vote on the floor. But this type of legislation doesn't require that, so we can move forward with a simple majority. However, there are a lot of limitations to the reconciliation process. Everything in a reconciliation bill has to be financial. It needs to deal with spending or revenues and it can't be incidentally related to those. That has to be its primary purpose. Tax provisions are perfect for this. It cannot increase the deficit outside of the budget window. The budget window is typically 10 years. Then inside that budget window, you can only increase or decrease the deficit by the amount in the reconciliation instructions. Reconciliation instructions are set again, by a simple majority on a budget resolution in the House and in the Senate. That number can be hard to define. We also can't touch Social Security, by the way, which is why you never see Social Security in a reconciliation bill. However, that number is really difficult to come to an agreement on sometimes, and I predict that we're going to face some issues just in getting to that budget reconciliation number before we even start to put together the bill. April Walker: That's a great summary, and we used reconciliation before to actually pass TCJA and some other legislation in the past few years, but it's still not how I grew up learning how law was passed. It's a little bit interesting and that's a great summary. Kasey, I led with saying, we don't think it's going to be a straight extension of TCJA and some of the other proposals that have been thrown out throughout campaigns. Talk through a little bit about specific provisions, what they're scoring out at, why they may or may not be included in this legislation. Again, I don't think we have to say this. This is all just speculation on our part. We will have to see what we will see once it turns to 2025. Kasey Pittman: Some of it is really speculative. We're guessing, they are educated guesses based on history and based on what influential policymakers are telling us. For many months, Republicans have really optimistically been planning for reconciliation, hoping to capture both chambers, hoping that Trump would be in the White House. They've been planning. Honestly, there's been a ton of organization inside the House Ways and Means Committee around it. What I said just a minute ago was that I think we're going to have trouble getting to that number, and here's why. If we want a blanket 10-year extension of the Tax Cuts and Jobs Act, all these taxpayer-favorable provisions, they're mostly taxpayer-favorable and we'll get into that in a second too. It's going to cost $4.6 trillion. Just for benchmarking for everybody, our national debt, which is the sum accumulation of all the deficits we've ever run right now is $35 trillion. That's really impactful because each year, honestly, I believe since Clinton, we've run at a deficit and some of the Clinton years too. But each year, since I was in middle school, we've run at a deficit, which means we're spending more money than we're bringing in, and part of the reason we're spending more money than we're bringing in is because we have to pay interest on all this debt. It's really come to a head over the last couple of years for two reasons. One, our debt skyrocketed. Recently, TCJA added to it. COVID certainly didn't help it at all. Then additionally, because we've had such high inflation, the Fed has increased interest rates and that's the rate that we pay to service the debt. In FY 24, which ended at the end of September. This year, we paid over a trillion dollars just to service our debt, not paying down our debt, just paying the interest on our debt. That's more than we spent on defense spending for the entire year. It becomes a liability if our debt is too large. Particularly, we like to compare it to our GDP. This year we ran a $1.8 trillion deficit. Over a trillion of that we could say is attributable to interest costs. Anyway, here we are. We've got $4.6 trillion to extend the TCJA. Then we've got a whole host of other campaign proposals that Trump made on the trail. No SALT, and we'll get to SALT in a second. No SALT, no tax on tips, no tax on overtime, no tax on Social Security benefits. There's family caregivers credit for home caregivers. There's just a number of things, and some of them are hard to score because there's not a lot of details around the policy yet. They're more on the idea than the actual detailed policy phase at this point but those are a lot and estimates are 8-10 trillion with the Tax Cuts and Jobs Act plus all of the other campaign promises, and that is just wild as compared to our current national debt and the fiscal responsibility that I think a lot of policymakers and Americans really are focused on. Do I think that Senate Republicans and House Republicans are going to come together and say, let's write a $10 trillion bill that's not paid for at all, that increases the deficit? No, I don't. We still have deficit hawks in the Republican Party, we have people who are really concerned about it and for good reason. That's going to be a struggle. I want to say SALT is really important here. Republicans are fairly united in the general extension of Tax Cuts and Jobs Act. There's a lot of campaigning this cycle on it. It's been a priority where we're fairly unified. However, that's not where it ends. We're looking again at these small margins in the House and the small margins in the Senate. When we have that, we have individual policymakers who have a lot of influence. We saw that in 2021- 2022, when Democrats had a big bill and they said, Hey, this is our wish list, and Joe Manchin and Kristen Sinema, who are Democrats, turned independents in the Senate, said, Oh gosh, no, thank you, that's way too big. Here's what we can do. We'll do the Inflation Reduction Act, which was a fraction and a little bit of a different direction on some than the original Democratic priorities. That's what we passed, because again, these two policymakers were able to exert a ton of influence. Then we saw it in 2023, when I think it was a total of eight house members ousted their speaker, which was the historic moment for Republicans in the House, what we see is a lot of power when we have those small vote margins. In the House, there's a really strong caucus for repeal of the state and local income tax, a limitation of $10,000. It's bipartisan. But there are a number of Republicans on there, particularly from high tax states, from traditionally blue states, New York, California, Connecticut, New Jersey. There's dozens of them, really, and they've won re election to the House and they've campaigned on this, and this is going to be a priority for them. I think it's really impractical to think we're going to see a tax bill that doesn't have SALT attached to it because this is a pretty strong caucus. Again, the margins are small, and to fully repeal SALT for 10 years is another $1.2 trillion. Now I'm at $6 trillion April, and that's before the overtime and before the Social Security, which is already system in peril in terms of being able to fund it. It's not quite that simple, and we do have deficit hawks. When we saw Tax Cuts and Jobs Act originally come through in 2017, we used the reconciliation process, Republicans did, and then Democrats used it in 2022 to pass the Inflation Reduction Act. There were many Republicans who wanted much more than TCJA cost. TCJA eventually they came to an agreement, and they said, We can do $1.5 trillion. 1.5 trillion is what we can sign on for. We can get everybody on board for that. That's what the budget instruction said. You can write a bill that increases the deficit by 1.5 trillion dollar over 10 years and so they did that. But it's not quite that simple. People say, $1.5 trillion, it wasn't 1.5 trillion dollar in tax cuts. It was $5.5 trillion in tax cuts with four trillion dollar in revenue raisers, some of them were pretty simple. I replaced these itemized deductions with the standard deductions, they kinda offset, but there were some provisions in there that were just revenue raisers and one of them is 163(j), the business interest limitation. Then additionally, we couldn't see them all through the entire budget window and still hit that mark. When I originally described it literally in 2017, 2018, when I was talking about it, I would say. Hey, look, we've got all these dials, and at the top, we've got this big number, and this is what we've added up to. We want to turn this dial up, but that costs too much money, and that puts us over, so maybe we dial it down on the number of years or maybe we add this revenue raiser. We're trying to back into this $1.5 trillion number, and that's part of the reason we saw some of these changes that transitioned under TCJA. We're seeing right now the bonus depreciation number come down. We've seen a change in how we calculate ATI for that business interest limitation, and we've changed how we deduct research and experimental expenditures. Honestly, they just couldn't make it all the way through that budget window at that number. Just a quick note on those things that have already changed, we saw a bipartisan bill sail through the House, sail through 83% vote margin, 357-70, I want to say on January 31 this year, and it died in the Senate. Senate Finance Committee Leader Ranking member, Mike Crapo, said, No, thank you. [He was] really confident that he was going to have a majority in the Senate in 2025 and he does, and he now also is able to have a Republican House to work with. One of the questions I get a lot is, do I think that we're going to see that bill be taken up in the lame duck session? My answer is no, I do not. I don't see what the incentive is for Republicans to make the concessions in there with Democrats around the refundability of child tax credit because they've got different methodologies on that. I don't see an incentive for them when they know they're going to run the table next year. April Walker: One thing I know you and I have talked about before, there's in evaluating “pay fors” and revenue raisers, there's the ERC provisions that are in that legislation that you're talking about in the past. I guess that's still potentially on the table ending ERC in January, that's potentially out there. What about tariffs? Tariffs have been suggested as a revenue raiser. How does that work with reconciliation? Kasey Pittman: There are a couple of revenue raisers that have been widely talked about, and I think there's a lot of bipartisan agreement around ending the employee retention credit early, and that's scored, if they use it from the old bill, that's scored around $77 billion. But you have to think that's drop in the bucket when we're talking about $6 trillion, $8 trillion, $10 trillion dollars. But it helps - every bit helps, obviously right? And then there's another one that's clawing back a lot of the IRA provisions, some of those clean energy provisions and semi recently, I think last weekend, President Elect Trump said,"Hey, I'm going to take away this $7,500 EV credit. We're not doing that anymore once I'm president." That's one item, but there are a lot of energy provisions outside of just that. That's the one that I think most individuals know about, but there are a lot of energy provisions outside of that. How they dismantle that is going to be really interesting to me, because there are some proponents who just say kill it all. This is not where our priorities are. There are others and there was a letter, I want to say to Speaker Johnson in the summer, that came from a number of House Republicans, a dozen or so that said, Hey, these are really beneficial in my district. I really hope that we and the language we've heard a lot of here is take a scalpel and not a sledgehammer. That's the talking point, scalpel and not a sledgehammer, to clawing back some of these provisions. I do expect some exploration of clawing back those provisions, and then tariffs. President Trump has talked a lot about tariffs and we've heard a number of things between 10 and 20% across the board tariff rate for anything coming into the country, about 60% on China. I believe we've heard 100% on cars coming from Mexico. What we don't know is and I've gotten a ton of questions on this, honestly. What we don't know is how serious he is about those. Is it an idea? Is it something that he intends to use as a bargaining chip in trade negotiations? Is it something that's going to be applied potentially in a more specific niche, these particular areas? That's what we saw in his first presidency was that it was particular items coming in. We saw it on aluminum, we saw it on steel. Or is it going to really be, does he intend to do it across the board? The thing is that presidents do not have completely unfettered power here, but they have the ability to enact certain tariffs without the consent of Congress. That being said, unless they find a way to write that into the reconciliation bill, they can't use the money they believe they'll generate from the tariffs as an offset to try to get back into that number. Because again, TCJA, $5.5 trillion in cuts, $4 trillion in revenue, if we want to include that in revenue, it's going to have to be present in the bill in some fashion. What I have been reading and researching a little bit, does it have to be explicit or does it have prescriptive or does it have to authorize him to move in that area? I'm still doing a little research there. But anyway, it would have to be in the bill in order to be included in the revenue scoring. April Walker: Lots of items to think about as we're rapidly going towards the end of the year and our listeners are [a lot of] tax partitioners talking to clients. I think another top question I'm sure you've been getting is, what are we thinking about timing? When is this going to happen? When is legislation going to happen? Because we really think it's going to happen, they're not going to let TCJA expire at the end at 12/31/25. But what are we thinking? Kasey Pittman: Speaker Johnson has been very bullish on this and saying he would like a bill coming out of the house, not necessarily enacted, but out of the house in the first 100 days of Trump's presidency. Just if we're going from inauguration day of January 20th, that date would be April 30th. That is a really ambitious goal. There's a number, it's ambitious in ideal scenarios. There's a ton of other priorities as well, including government funding, which as of this moment, is not done, and we don't know if it'll be a continuing resolution or if they'll fund the government through the end of the year. But there are a lot of priorities for this Congress, and one of them is the confirmation of all of President Trump's picks for various administration positions, which is going to complicate this. Because right now, the House Republicans have the generally accepted number is 218 seats. There are five seats outstanding. They could wind up with a total of 223. That's probably more like 221, 222, maybe 220, but probably 221, 222 (See note above for the final results). There are three people from the House that President Trump has nominated. They're leaving their seats, assuming they get this job, Matt Gaetz has already left his seat, and that's going to complicate matters. It's not an easy swap. Speaker Johnson will be working with a very tight majority, like a very razor thin majority in the House until all of that is sorted out, and you've got new policymakers in seat. That's going to complicate things as well, and it's going to be difficult to get to that number. Again, I think that there are a lot of different, even within the Republican Party, even though they believe in the TCJA. They believe it was stimulating. They think that they should extend it. Deficit funding for a large number is going to be really difficult. First, we're going to have to come to that number, and that is going to be a negotiation in and of itself. It's not going to be $10 trillion. It's not going to be, hey, we get everything we want for 10 years. In addition, then they have to figure out how to work with that number. Let's say $2 trillion, I'm just going to throw that out there, $2 trillion, $3 trillion, whatever they've decided on. You can increase the deficit over the budget window by $2 trillion dollars, $3 trillion dollars. I've got 10 years. In my budget window, what am I going to do with it? I could try to find a ton of revenue raisers, and I think it's honestly going to be a mix of these things. I could try to find a ton of revenue raisers. I could try to reduce government spending. I could not put everything in place for 10 years. We could see a bill that comes out for four years. Even though the budget window could be larger, they could say, hey, they're all going to expire after four years because that's how we can get most of our priorities in, and then we're going to kick this can down the road. When they crafted TCJA, it was very intentional. The portion that they made permanent was the corporate rate, there's a much longer planning runway for large corporations and businesses than there are for individuals, typically.That was smart. In addition, the things that are expiring are the things that are popular with voters, lower rates, increased child tax credit. It puts political pressure on the extension of these items. They could do that again because the items we're talking about are by and large, popular with voters. Nobody's looking, nobody raises their hand and says, I'd really love you to increase my tax rate. Personally, thank you so much. I'd like my bill to go up every year. Now, many taxpayers are okay with it and they believe in the methodology of a graduated system, but nobody's personally asking for an income tax increase that I've seen anyway in my practice. They're popular, they could kick it down the road and put pressure on the 2028 election, if they only do it for four years. I'd be interested to see what happens. They could also only enact them partially or phase them out or make other changes. There's a lot to figure out. There are a lot of dueling priorities and there's a lot of money at stake. April Walker: Lots to think about as we move into 2025, but I so appreciate your sitting down with us today, Kasey, and thinking through the scenarios. Very helpful for me. In closing, as we wrap up this podcast, I like to take a little bit of a left turn and think about, hey, we're together, we're taking a journey together towards a better profession in doing that, I like to get a glimpse of my guest other journeys outside of the world of tax. Kasey, tell me about a trip you have planned or a bucket list item you've got on the agenda. Kasey Pittman: Actually, we took our kids out of the country for the first time this summer, and we had a little bit of a larger trip planned and it got delayed because of a couple of years, mostly because of COVID, honestly. It was wonderful. We went to Germany and Austria and London, and we were hoping to add France on there too, but we couldn't because it was the Olympics and it was bananas getting into France. It was absolutely bananas. We are hoping to go, not next summer, but maybe the following summer go back and bring the kids to France. I enjoy traveling a lot, but I think it's so cool to see it through their eyes, too. I think it's really neat because the world. April Walker: I love to do that, too. Traveling is definitely I didn't do it a ton as a kid, and so I try to do it and get my daughter on the road as much as possible. Kasey Pittman: But in the short term, April, I'm going to come down your way. Let's see. I want to say it's the first Sunday of December to watch because on Monday, it is the Women's NCAA soccer championship, which will be very exciting. It'll be our third year and it's in Cary. Unfortunately, the next three years, I think, after that are in California, and we're not going to make that trip. It's probably our last year. April Walker: Yes, you're always welcome to come down to a lovely North Carolina. Hopefully the weather will cooperate. Kasey Pittman: Fingers crossed. April Walker: Thanks again so much, Kasey. Again, this is April Walker from the AICPA Tax Section. This community is your go to source for technical guidance and resources design, especially for CPA tax practitioners like you in mind. This is a podcast from AICPA and CIMA together as the Association of International Certified Professional Accountants. You can find us wherever you listen to your podcast and we encourage you to follow us so you don't miss an episode. If you already follow us, thank you so much. Please feel free to share with a like minded friend. You can also find us at aicpa-cima.com/tax and find our other episodes and get access to any resources we mentioned during this episode. Thank you so much for listening and wishing everyone a happy upcoming holiday season. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

Tax Policy in 2025: Challenges and Opportunities | tax break Episode 27

tax break

Play Episode Listen Later Dec 10, 2024 27:35

We all knew that 2025 would be a watershed year for tax policy, with the expiration of several key provisions of the Tax Cuts and Jobs Act (TCJA) alone guaranteed a busy tax policy year. Now the 2024 elections are over, resulting in the election of President-elect Trump and a Republican Congress. On this episode of tax break, host Rob Kovacev is joined by Miller & Chevalier Tax Policy Co-Lead Jorge Castro to answer some pressing questions: Do the election results provide taxpayers with more certainty or less? What is likely to happen to TCJA? What are the other big changes that may happen to the tax code? ********* Thank you to Jorge Castro for joining us: https://www.millerchevalier.com/professional/jorge-e-castro Questions? Contact us at podcasts@milchev.com. tax break is not intended and cannot be relied on as legal advice; the content only reflects the thoughts and opinions of its hosts. tax break is a podcast about tax law, brought to you by Miller & Chevalier and hosted by Loren Ponds and Rob Kovacev. We'll provide you with perspective on select tax issues that will go deeper than what the tax press covers, but not so deep that you'll have to pull out your regulations or read treatises to follow along. The aim of tax break is to focus only on the tax law issues that we find interesting. Subscribe to tax break wherever you get your podcasts.

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America's Roundtable with US Senator Marsha Blackburn | Advancing Principled Reforms —Tax Cuts and Jobs Act | Spearheading DOGE Acts | CLEAR Act: Enforcement of US Laws — Deporting Illegal Immigrants | ICC Assault Against Israel's Sovereignty

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Play Episode Listen Later Dec 8, 2024 13:41

Join America's Roundtable (https://americasrt.com/) radio co-hosts Natasha Srdoc and Joel Anand Samy with U.S. Senator Marsha Blackburn, member of the Finance Committee; the Commerce, Science & Transportation Committee; the Veterans' Affairs Committee; and the Judiciary Committee. America's Roundtable discussion with Senator Marsha Blackburn covers the following key topics: The urgency to address tax reform in America. Will Congress make permanent the Tax Cuts and Jobs Act (TCJA) set to expire in Dec. 2025? If there is a delay, how will the expiration of the TCJA impact America's middle class, entrepreneurs and small business leaders across the nation? Senator Blackburn shares how she and Vivek Ramaswamy have been working over the past few months in tandem with Elon Musk on advancing government reforms. The business leaders have been tasked by President-elect Donald Trump to "slash excess regulations, cut wasteful expenditures” and restructure federal agencies through the newly established Department of Government Efficiency (DOGE). Sen. Blackburn just unveiled her “DOGE Acts” to cut spending and freeze federal hiring, as well as salaries. As America faces an illegal immigration crisis, Senator Marsha Blackburn's leadership is vital. Senator Blackburn's introduced the CLEAR Act — Clear Law Enforcement for criminal Alien Removal Act of 2024. Find out about the details on how it will enhance Federal, State and local assistance level to enforce immigration laws, to amend the Immigration and Nationality Act, to authorize appropriations to carry out the State Criminal Alien Assistance Program, and for other purposes. Listen to Senator Blackburn response regarding International Criminal Court's decision to issue a warrant to arrest Israel leaders including the Jewish state's Prime Minister Benjamin Netanyahu and former Defense Minister Yoav Gallant. You can listen to US Senator Blackburn's conversation with Vivek Ramaswamy on her podcast - UNMUTED (https://podcasts.apple.com/us/podcast/department-of-government-efficiency-doge-with/id1736996395?i=1000678201961) - and watch the video via You Tube (https://www.youtube.com/watch?v=b3Mou5Nl4C0). Further reading: The Hill | Blackburn unveils ‘DOGE Acts' to cut spending, freeze federal hiring and salaries (https://thehill.com/homenews/senate/5025294-blackburn-doge-acts-spending-cuts/) Fox News | Border security Blackburn moves to allow local law enforcement to capture, help deport illegal immigrants (https://www.foxnews.com/politics/blackburn-moves-allow-local-law-enforcement-capture-deport-illegal-immigrants) Marsha Blackburn Introduces Bill Empowering Local Law Enforcement To Help Federal Government Deport Criminal Illegal Immigrants (https://www.clarksvilleonline.com/2024/03/07/marsha-blackburn-introduces-bill-empowering-local-law-enforcement-to-help-federal-government-deport-criminal-illegal-immigrants/) americasrt.com (https://americasrt.com/) https://ileaderssummit.org/ | https://jerusalemleaderssummit.com/ America's Roundtable on Apple Podcasts: https://podcasts.apple.com/us/podcast/americas-roundtable/id1518878472 Twitter: @MarshaBlackburn @ileaderssummit @NatashaSrdoc @JoelAnandUSA @supertalk America's Roundtable is co-hosted by Natasha Srdoc and Joel Anand Samy, co-founders of International Leaders Summit and the Jerusalem Leaders Summit. America's Roundtable (https://americasrt.com/) radio program - a strategic initiative of International Leaders Summit, focuses on America's economy, healthcare reform, rule of law, security and trade, and its strategic partnership with rule of law nations around the world. The radio program features high-ranking US administration officials, cabinet members, members of Congress, state government officials, distinguished diplomats, business and media leaders and influential thinkers from around the world. Tune into America's Roundtable Radio program from Washington, DC via live streaming on Saturday mornings via 65 radio stations at 7:30 A.M. (ET) on Lanser Broadcasting Corporation covering the Michigan and the Midwest market, and at 7:30 A.M. (CT) on SuperTalk Mississippi — SuperTalk.FM reaching listeners in every county within the State of Mississippi, and neighboring states in the South including Alabama, Arkansas, Louisiana and Tennessee. Listen to America's Roundtable on digital platforms including Apple Podcasts, Spotify, Amazon, Google and other key online platforms. Listen live, Saturdays at 7:30 A.M. (CT) on SuperTalk | https://www.supertalk.fm

Ep #216: Trump 2.0: The Potential Impact on Taxes, 401(k) Limits, and More

Money Talk For ER Docs™

Play Episode Listen Later Dec 3, 2024 24:15

Today, we'll break down the latest updates on 401(k), IRA, and HSA limits for 2025, and forecast the tax landscape under the new administration. We'll also look at the possible extension and expansion of the TCJA, the SALT cap, and tax credits—and even provide a few things you may want to do before year-end and things you may want to wait to do until after the new year kicks off.

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2025 tax preview: Perspective from an AICPA tax policy advocate

Tax Section Odyssey

Play Episode Listen Later Nov 26, 2024 18:07

In this joint episode with the JofA podcast, host Neil Amato discusses with Melanie Lauridsen, Vice President of Tax Policy & Advocacy for the AICPA, what tax practitioners can expect regarding tax legislation. The conversation covers key tax topics following the 2024 election, including the future of the Tax Cuts and Jobs Act (TCJA), beneficial ownership information (BOI) reporting, and disaster relief efforts. Melanie provides insights into the challenges and opportunities facing tax professionals in 2025, emphasizing the importance of staying informed. What you'll learn from this episode: The latest updates on disaster relief for BOI reporting. Melanie's insights about the potential future of the TCJA provisions. How IRS funding might be impacted by the new administration AICPA resources Planning for tax changes – CPAs need to not only brace for tax law changes such as the Tax Cuts and Jobs Act (TCJA) and expiring provisions but also be proactive in planning for them. Tax Advocacy – Advocacy is a core element of our purpose and value proposition. It is a strong mechanism for promoting trust and confidence in the CPA and CGMA credentials around the world. Transcript April Walker: Welcome back to the AICPA's Tax Section Odyssey podcast, where we offer thought leadership on all things tax facing the profession. I'm April Walker, lead manager from the Tax section, and today we have a joint episode with the JOA, providing information on several important tax topics, such as BOI, disaster relief, and also upcoming potential tax legislation. Let's hear more. Neil Amato: Welcome to the Journal of Accountancy podcast. This is Neil Amato with the JofA. This episode is a special collaboration between the JofA and the Tax Section Odyssey podcast. It's Nov. 19 as we're recording, two weeks since the 2024 election. With the election over, we have results. We also have questions about the future of several tax topics. Here to provide some analysis and clarity on those topics is Melanie Lauridsen, vice president–Tax Policy & Advocacy for the AICPA. Melanie, welcome back to the podcast. Melanie Lauridsen: Thank you for having me back, Neil. Amato: We talk pretty regularly, pretty much a quarterly basis. It's safe to say that even if we keep this discussion fairly narrow in scope, there is plenty to discuss, so we'll get right to it. I'm going to tease for the listeners that there will be discussion of the future of the Tax Cuts and Jobs Act. But first, I'd like to ask about BOI reporting, beneficial ownership information reporting, as that's been in the news lately as well. What's the latest from your lens, the advocacy lens, on the topic of FinCEN's disaster relief for BOI? Lauridsen: Good topic, Neil. Disaster relief is something, regardless of what it is, whether it's tax or BOI, it is critical that people are able to get it as quickly as possible in the largest scope possible. With BOI, we are grateful that FinCEN did offer disaster relief for victims of various hurricanes, most notably Hurricane Milton and Hurricane Helene, which created quite a bit of damage to the areas they hit. But, unfortunately, the scope of the relief, particularly for those victims of Hurricane Helene, is not as broad and as encompassing as we would have liked it to have been. They did offer a filing relief for those victims. However, they didn't extend it to entities that had been created prior to 2024 and therefore had a Jan. 1, 2025, deadline. We know that [for] some of the entities, it took everything away. It destroyed everything, and those entities have years to rebuild, and they really could use an extension. With that in mind, we are actually working with various state CPA societies, and we are also working with FinCEN in order to broaden the scope that was issued, in particular for victims of Hurricane Helene. Of course, we are working with people on the Hill because there are a lot of questions around the Corporate Transparency Act and BOI reporting to begin with, much more so also with disaster relief that they would like to see some expansion of the scope, too. Amato: Yeah, and on that topic of the reports that are in versus the reports that are expected, it's still a pretty small number. I know people like to do things at the last minute, but it's something like 6.5 million of 32 million, so still a long way to go. Lauridsen: There is an awareness issue there, and FinCEN is highly aware that there is an awareness issue because, like you said, 6.5 million filings of 32.6 [million], there's a little bit of a disconnect, especially when we're in November. So we're talking there's a month and a half to file to meet those other — what is it? — 20-plus million filings that we have to go in 1½ months? I don't think they're going to be able to meet those numbers, so, yes. But a couple of things to note about that 6.5 million. Of those 6.5 million, the majority of those filings are for entities that were created in 2024 and had that 90-day deadline, and also for the 30-day corrected and updates that are needed, and that's the 30-day deadline needed. A lot of the existing entities, those that were created prior to 2024, still need to file. Now, FinCEN realizes that their numbers are not where they want them to be, and they are now focusing on awareness and not so much on enforcement. But they are, like I said, making pushes for awareness, and they were even on our AICPA Town Hall, so you can look at the archive there because we did host Phil Lam for that. But also, the other day, I was watching national television, and I saw one of their commercials. I just about fell out of my seat. I didn't think the messaging was as clear as it could have been, but they are trying to make efforts there. Amato: Was this the coffee shop ad that you saw? Lauridsen: Yes, it is. Amato: We wrote about that earlier this year, that the outreach had begun. But still, I guess, a ways to go on that topic. Let's look ahead to one item that was popular at the tax conference. It's popular in the news headlines, and I know it's something you're paying attention to: the Tax Cuts and Jobs Act. It's a very open-ended question, but I'll ask it anyway: What's the future of the Tax Cuts and Jobs Act? Lauridsen: Well, Neil, we would all love to know exactly what the future is. But, the Tax Cuts and Jobs Act, it's interesting because a lot of people said prior to the election, we always knew that tax was going to be on the agenda. People were saying that, it all depended on if it was Democrat or Republican that ended up taking the presidency. Ultimately, the same topics are at stake. TCJA was always something that was going to be debated and discussed, regardless of who ended up being in office and who will be in office. The difference is we definitely know that President-elect Trump would like to see TCJA provisions become permanent. Now, the reality is all those provisions cost money, and there are real dollars associated with it. Even though we are going to be seeing in 2025 the trifecta effect, where the Republicans have swept across the board, it doesn't mean that everybody is in line with the same provisions, and therefore it doesn't mean we know exactly what will be coming. A lot of what is to come becomes an argument of how much things cost and how much things don't cost and what can be included and what can be agreed on. The debate is still very much alive as to what will happen with TCJA. I think, this is my pure speculation, I think we're going to see a hybrid of all the things that are there and not necessarily everything becoming permanent. But who's to say? Things could absolutely change. Amato: Do you want to talk about any of the particulars within that, for example, the SALT cap, estate tax policies, the future of the corporate tax rate? Lauridsen: All of those pieces are very interesting. The SALT cap, let's start with that one. The SALT cap, we have heard that they would like to eliminate the SALT cap. On a personal level, sure. I would love to see that go away. I know quite a few people feel that way about it. But the reality is that it costs money. Right now, the SALT cap at the $10,000 cap is a revenue raiser, and it helps pay for other aspects of it. If they were to eliminate it, that will cost a lot more money than what is anticipated. If we were to see a change, again, this is pure speculation on my part, obviously, we have to wait and see how things play out and what indicators we see. Right now, we haven't seen any specific indicators, but I wouldn't be surprised if the SALT cap ends up being raised slightly, not completely eliminated because, again, it costs money to eliminate it. Amato: OK, state tax policies next. Lauridsen: You said estate? Amato: Estate. Sorry, estate, not state, as opposed to state and local tax. Now, estate tax. Lauridsen: With estate tax policy, there's definitely a desire and a will to see the cap also eliminated because with TCJA, after TCJA, it will cut in half of what we're seeing. Who knows what we'll see in that play. Again, it costs money to be able to have no limit for estate tax planning purposes. I do think like the SALT cap we're going to see something come out in the middle. Maybe it'll maintain, maybe it might increase, but completely unlimited — I don't see that happening, either. Amato: Then finally, the corporate tax rate as it relates to the TCJA. Lauridsen: The corporate tax rate, that is definitely something that has been discussed. We have heard during the campaigns from President-elect Trump that he would like to lower the corporate tax rates, but please keep in mind that the current corporate tax rates in TCJA, again, they cost money. What is paying for those corporate tax rates are those small business provisions that we would like to see come back. For example, Sec. 174, the R&E expenditures. We would like to see that 100% bonus depreciation. We would like to see that come back, but those are some of those provisions that pay for that lower corporate tax rate. Of course, there's the [Sec.] 163(j) interest expense deduction and Sec. 199A, the qualified business income. Again, all those pieces come into play into that corporate tax rate because, technically, those are the pay-fors for that corporate tax rate, so it's a handoff. Amato: Good description of the pay-for aspect of it. Anytime there's a change in administration, I guess the IRS funding topic comes up. The IRS has said many times that the funding it received under the Inflation Reduction Act was helping it provide better service. Now, I guess that funding is going to be up for debate. What do you see as the future there? Lauridsen: Well, that is definitely something. The funding for the IRS, specifically, the Inflation Reduction Act, the IRA as we call it, is something that we are definitely going to keeping an eye on because, if you take a look at the Inflation Reduction Act, the majority of the money, $80 billion — that was allocated towards enforcement. Now there was a piece that was allocated to IRS services, and it is that piece, that portion where we've seen the increased answering of the telephone, the hiring of people at the IRS to be able to provide services with that. Now, we know that that particular funding for IRS services from the Inflation Reduction Act is set to run out by 2026. If the money runs out, what do you think will happen? We'll see decreased IRS services. The way we're looking at it is we do know there is interest in clawing back the Inflation Reduction Act funding and, specifically, for the enforcement piece of it. Our position is, well, let's not take it away from the IRS. Let's rebalance it and shift it over to services. One thing to note, though, is enforcement is a critical function of the IRS. Not everything under enforcement is audits, liens, and levies — all these things that people don't want to see happening. There are pieces of enforcement like Chief Counsel's Office that is covered under enforcement, and Chief Counsel are the ones who provide the regulations and those guides, the guidelines to people in order to be compliant with their taxes. It is a critical function of the IRS. Now, do they need as much as they got? I would venture to say and would like to see some of that money going from enforcement to IRS services and not necessarily clawed back. Amato: That's great. Now, I said we're two weeks since the election. We're also about one week since the AICPA & CIMA National Tax Conference. I know you were there. I know you were busy yourself, but maybe, as you interact with members, as you interact with people in Washington, if you could then look ahead to 2025, what do you see as challenges that are tax-related and also opportunities for the new year? Lauridsen: Some of the challenges that our people have, and we've actually done some informal surveys, too, and the results are the same and we're seeing this trend. There's a lot of growing concern with new legislation coming and, in particular, retroactive legislation or midyear legislation, which makes it particularly hard for members to be able to keep up with it. Retroactivity doesn't help because then you have to amend returns if you already started down that process. Of course, with both last-minute legislation and retroactive legislation, you have to keep on top of the tax changes. Now, you should do that on every given year, but when they do it retroactively or midyear, it makes it particularly hard when you're in the middle of filing season. That is one of the biggest challenges that our members are concerned about. Also, with new legislation, that means we are waiting on guidance from the IRS. The IRS [process] can be very time-consuming in looking at the rules to able to provide guidance. Again, people just want to be compliant. People aren't trying to get out of it. They just want to be compliant, and they need some guidance. That's another concern that we see there. Of course, other challenges that we're seeing associated with Sec. 199A — we would love to see the extension of that to continue, but ideally, we would also like to see the expansion of Sec. 199A. Again, that costs money, and where is that money going to come by in order to be able to achieve something along those lines within it. But, there are opportunities, Neil. Some of those opportunities there's mobile workforce, opportunities there's an appetite for that hopefully that we can see move forward, and that would be something that would make a lot of people's lives a lot easier. That essentially is saying to put a safe harbor that if you work less than 30 days in a state, then you don't file at that state level. It would have to be over 30 days to be able to move forward with that. The expanded use of 529 accounts to be able to pay for studying to sit for the CPA Exam or to be able to get your financial planning certification associated with that. There are pieces of opportunities. Another piece of opportunity that we would like to see — maybe we'll see a change with the Form 1099-K, with the threshold. Remember that was at $600, and there's been a debate where it could be, so maybe we'll see an increase in that threshold filing. Of course, disaster relief. We would love to be able to see some of the bigger positions that we've had associated with disaster relief to make a real difference for victims of disasters. Amato: Good points all. Thank you very much, Melanie. I'll give you the opportunity to give a closing thought if you have one. Lauridsen: My closing thoughts are, I think 2025 is a huge tax year. I think we just need to buckle down and get ready for that roller coaster that's going to be coming, and it's always important to keep up to date and follow through, but in this year, changes are happening. They're happening quickly. I think podcasts like this, webcasts, things like the AICPA Town Hall, they become even more critical for people to keep up to date. Amato: Great. We will keep having you on. We'll see you again in 2025, and thank you for being on the show today. Lauridsen: Thank you, Neil. Keep your finger on the pulse of the dynamic and evolving tax landscape with insights from tax thought leaders in the AICPA Tax Section. The Tax Section Odyssey podcast includes a digest of tax developments, trending issues and practice management tips that you need to be aware of to elevate your professional development and your firm practices. This resource is part of the robust tax resource library available from the AICPA Tax Section. The Tax Section is your go-to home base for staying up to date on the latest tax developments and providing the edge you need for upskilling your professional development. If you're not already a member, consider joining this prestigious community of your tax peers. You'll get free CPE, access to rich technical content such as our Annual Tax Compliance Kit, a weekly member newsletter and a digital subscription to The Tax Adviser.

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