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Yahoo
3 days ago
- Business
- Yahoo
How Trump's big bill could affect your taxes
President Trump's bill to cut taxes and spending centers on an extension of his previous round of tax cuts, which Republicans slated for expiration at the end of this year back in 2017. As such, it will preserve the status quo on many big parts of the code so that taxpayers won't see any change in things like the amount of money the government takes out of their paychecks. Other tax cuts in the legislation now moving through Congress will be brand new, though most of the new additions are scheduled to end after a few years. Here's a look at some of the big-ticket items in the latest round of GOP tax cuts. Trump's 2017 tax law cut many individual income tax rates, and those would continue into the future through the current legislation. Under current law and moving up the income spectrum, marginal rates are 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. The new GOP law will lock those rates in place. The extension of those rates will reduce federal revenues by $2.2 trillion through 2034, according to the Joint Committee on Taxation (JCT). If they were allowed to lapse, rates would change to 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, and 39.6 percent. Only the 10-percent and 35-percent rates were left alone by the 2017 tax cuts. Trump in recent weeks floated letting the top rate go back to 39.6 percent from 37 percent as a way to lower the $3.8 trillion cost of the bill's tax portion, but he has since backed away from that idea. The law preserves — and temporarily boosts — the higher standard deduction, which was nearly doubled back in 2017. The new boost is $1,000 for individuals and $2,000 for couples filing jointly and will last for four years. This is paired with getting rid of personal exemptions, making tax filing simpler for many taxpayers. In 2024, the standard deduction was $14,600 for individuals and $29,200 for married couples. The higher standard deduction is projected to reduce revenues by $1.3 trillion through 2034. The loss of personal exemptions will add $1.9 trillion to federal revenues, resulting in a net revenue gain between the two measures. The bill creates a temporary full deduction for tips and overtime pay, allowing taxpayers to avoid paying taxes on those types of compensation. Taken together, the tax breaks will reduce revenues by about $164 billion through 2028 when they expire. People who work in the restaurant industry say they're concerned that the tax break will motivate customers to pay fewer gratuities, since tipping is left to the discretion of individual shoppers and diners as opposed to being a component of the employer-paid wage. 'I'm afraid that people are going to want to tip less with that income not being taxed,' one New York City bartender, who asked not to be named, told The Hill. The person also expressed concern that the no-tips rule could add to tensions in his restaurant between the front-of-house staff, who work for tips, and the kitchen staff, who do not. 'In the industry, the bigger concern is, why would the front-of-house not pay taxes when the back-of-house will still be paying taxes because they don't get tips?' the person said. Tax experts told The Hill the measures could add to the amount of paperwork that tax filers — both employers and employees — need to fill out, depending on how the IRS interprets the law and modifies its regulations and forms. The law gives an additional $4,000 tax break to seniors below a certain income threshold, which would be added to the $15,000 standard deduction and an already existing $2,000 deduction for seniors. Trump promised while campaigning to remove taxes on Social Security, which is funded through a payroll tax and then taxed again, above an income threshold, upon disbursal to bolster the Social Security fund along with Medicare. The enhanced deduction for seniors is a close substitute for the Social Security tax cancellation promised by Trump but is technically a different tax. According to congressional rules, the Social Social program cannot be altered through budget reconciliation, which is the legislative workaround Republicans are using to allow a party-line vote on their bill and avoid a Democratic filibuster in the Senate. Republicans haven't agreed on the most controversial provision of their tax bill — the state and local tax (SALT) deduction cap — but they're getting close. The initial proposal from the Ways and Means Committee raised the cap to $30,000, but members of the SALT caucus shot it down. Another proposal floated late Tuesday would bump the SALT deduction cap up to $40,000 — four times the current $10,000 cap — for people making $500,000 or less in income, three sources told The Hill. That level would increase by 1 percent a year over 10 years, according to one of the sources. Whatever they agree to, it will be expensive. Various estimates from the JCT put the cost of canceling the cap — which is a top priority for many blue-state Republicans — at around $1 trillion over 10 years. The SALT cap interacts with different parts of the tax code, including the higher standard deduction and the extended effective repeal of the alternative minimum tax (AMT), which costs more than $1.4 trillion in revenues. 'Even if you live in a place like New York, the combination of repealing the AMT and the $10,000 SALT cap was actually still positive for you. You were better off with the SALT cap because you lost the AMT than you would have been if the law hadn't happened at all,' Tax Policy Center senior fellow Howard Gleckman told The Hill. 'It was actually a good deal for people,' Gleckman said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-06-2025
- Business
- Yahoo
GOP beats down key budget office over tax plan projections
Republicans are using Congress's official budget scorer as a whipping boy, as they argue a major package of President Trump's tax priorities is costless, despite multiple projections placing the plan's price tag at trillions of dollars over the next decade. While the Congressional Budget Office (CBO) has not yet released its final estimate of House Republicans' 'One Big Beautiful Bill Act' as it advances on Capitol Hill, Republicans have increased attacks on the nonpartisan office over its cost projections of the party's tax cuts plan — which seeks to permanently lock in expiring provisions in Trump's 2017 tax plan, along with a host of other add-ons. 'The CBO sometimes gets projections correct, but they're always off every single time when they project economic growth,' Speaker Mike Johnson (R-La.) argued during an appearance on NBC's 'Meet The Press' on Sunday, asserting the bill 'is going to reduce the deficit.' 'They always underestimate the growth that will be brought about by tax cuts and reduction in regulations,' he said, while touting Trump's 2017 tax plan as bringing 'about the greatest economy in the history of the world, not just the U.S.' Trump also fumed about the CBO in a Friday post on Truth Social, while accusing the office of 'purposefully' underscoring economic growth projections of his tax cuts. 'The Democrat inspired and 'controlled' Congressional Budget Office (CBO) purposefully gave us an EXTREMELY LOW level of Growth, 1.8 percent over 10 years — how ridiculous and unpatriotic is that!' he wrote on social media. 'I predict we will do 3, 4, or even 5 times the amount they purposefully 'allotted' to us (1.8 percent) and, with just our minimum expected 3 percent growth, we will more than offset our tax cuts (which will, in actuality, cost us no money!),' he wrote. The CBO won't release a final growth projection for the GOP bill until later this week. However, the agency projected earlier this year that real gross domestic product (GDP) would grow at an average rate of 1.8 percent annually over the next decade if current law remains unchanged. The Joint Committee on Taxation (JCT) sees the tax provisions in the bill increasing the average annual growth rate of real GDP by 0.03 percentage points, 'from 1.83 percent in the present-law baseline to 1.86 percent, over the 2025-2034 budget window.' The Federal Reserve also has a long-term growth projection for the economy of 1.8 percent. In its latest projection summary released in March, the central bank sees the economy growing by 1.8 percent past 2027, which is the same projection it made in December. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Monday that the attacks come as no surprise for Capitol Hill watchers. 'They love CBO when it gives them the score they want or it hurts their opponents, and they don't like it when it tells them the hard truths about their own bill,' she said. 'I think relying on CBO and [JCT] for the guidance of what the likely economic effects are is absolutely the right way to proceed,' MacGuineas said. Republicans have long touted Trump's 2017 Tax Cuts and Jobs Act as a key contributor to economic growth, while pointing to higher revenues seen in the years since the bill's passage as evidence of the package's success and that the tax cuts have paid for themselves. But the GOP's 2017 tax law was not, in fact, a significant driver of economic growth and came nowhere close to growing the economy by an amount that would have offset its deficit additions. The law grew the economy by 0.2 percent in 2018, according to the CBO, which was the year following the tax law change when the effects would have been most pronounced. In order to offset its deficit additions, it would have needed to grow the economy by 6.7 percent, according to the Congressional Research Service — more than an order of magnitude larger than what it actually did. The 0.2 percent growth resulting from the 2017 Trump tax cuts measured by the CBO was in line with many other forecasters from the time, most of whom have been spared from the same whipping-boy treatment from Republicans that the CBO has received. Goldman Sachs and the International Monetary Fund each projected 0.3 percent growth, Moody's Analytics projected 0.4 percent growth, Barclays projected 0.5 percent growth and Macroeconomic Advisers projected 0.1 percent growth. Tax specialists and economists are generally dismissive of Republican growth claims. 'Everybody in my profession agrees with me,' Marty Sullivan, chief economist at Tax Analysts, told The Hill back in October. 'Nobody — 99 percent of economists — believes that there's going to be so much growth that it would offset any cost on any of these tax cuts.' 'You hear people saying, 'Wow, after the Trump tax cuts, we had the biggest economic growth in history' — well, we didn't,' he said. The meager additions to economic growth made by the 2017 tax law could be even less in the current law, since most of the main production provisions are not new but simply extensions of what is already in place, tax experts told The Hill. Economic growth effects of tax legislation — sometimes called 'dynamic effects' — are largest when they first appear, giving businesses new money for investment and consumers more money for spending. Over time, the effects of that initial cash infusion abate as new norms are established and additional capital is absorbed into existing production patterns. The debate over dynamic scoring is one of two major accounting controversies involving the bill, the other being whether the bill should be scored from the point of view of current law or current policy. From the perspective of current law, which expires at the end of this year, the tax cuts would add more than $5.5 trillion including interest to the national debt, according to the JCT. Republicans prefer to assume the continuation of their last eight years of policy into the future, which would allow that $5.5 trillion price tag to be ignored and for additional scoring to pertain only to changes made on top of it. More fiscal hawks have raised concern about the potential fiscal impact of the legislation in recent weeks, urging for more aggressive spending cuts to ride alongside the major tax plan. Republicans in the lower chamber have already approved major reforms to Medicaid and the Supplemental Nutrition Assistance Program, along with other programs, that have been estimated to reduce federal spending by more than $1 trillion over the next decade. Hard-line conservatives in both chambers are pushing for the party to slash spending even further, while some Senate Republicans have suggested the scope of the tax piece of the bill could be narrowed amid cost concerns. 'Why didn't Trump's 2017 Tax Cuts and Jobs Act make tax cuts permanent? Because the impact of the tax cuts on debt after 2025 was understood by THEM to be too great,' Rep. Thomas Massie (Ky.), one of only two Republicans to vote against the House bill last month, said in a post on the social platform X on Monday. 'Now they're employing new-math to claim that renewing the tax cuts, without cutting spending, won't impact debt.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
02-06-2025
- Business
- The Hill
GOP beats down key budget office over tax plan projections
Republicans are using Congress's official budget scorer as a whipping boy, as they argue a major package of President Trump's tax priorities is costless, despite multiple projections placing the plan's price tag at trillions of dollars over the next decade. While the Congressional Budget Office (CBO) has not yet released its final estimate of House Republican's 'One Big Beautiful Bill Act' as it advances on Capitol Hill, Republicans have increased attacks on the nonpartisan office over its cost projections of the party's tax cuts plan — which seeks to permanently lock in expiring provisions in Trump's 2017 tax plan, along with a host of other add-ons. 'The CBO sometimes gets projections correct, but they're always off every single time when they project economic growth,' Speaker Mike Johnson (R-La.) argued during an appearance on NBC's 'Meet The Press' on Sunday, asserting the bill 'is going to reduce the deficit.' 'They always underestimate the growth that will be brought about by tax cuts and reduction in regulations,' he said, while touting Trump's 2017 tax plan as bringing 'about the greatest economy in the history of the world, not just the U.S.' Trump also fumed about the CBO in a Friday post on Truth Social, while accusing the office of 'purposefully' underscoring economic growth projections of his tax cuts. 'The Democrat inspired and 'controlled' Congressional Budget Office (CBO) purposefully gave us an EXTREMELY LOW level of Growth, 1.8 percent over 10 years — how ridiculous and unpatriotic is that!' he wrote on social media. 'I predict we will do 3, 4, or even 5 times the amount they purposefully 'allotted' to us (1.8 percent) and, with just our minimum expected 3 percent growth, we will more than offset our tax cuts (which will, in actuality, cost us no money!),' he wrote. The CBO won't release a final growth projection for the GOP bill until later this week. However, the agency projected earlier this year that real gross domestic product (GDP) would grow at an average rate of 1.8 percent annually over the next decade if current law remains unchanged. The Joint Committee on Taxation (JCT) sees the tax provisions in the bill increasing the average annual growth rate of real GDP by 0.03 percentage points, 'from 1.83 percent in the present-law baseline to 1.86 percent, over the 2025-2034 budget window.' The Federal Reserve also has a long-term growth projection for the economy of 1.8 percent. In its latest projection summary released in March, the central bank sees the economy growing by 1.8 percent past 2027, which is the same projection it made in December. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Monday that the attacks come as no surprise for Capitol Hill watchers. 'They love CBO when it gives them the score they want or it hurts their opponents, and they don't like it when it tells them the hard truths about their own bill,' she said. 'I think relying on CBO and [JCT] for the guidance of what the likely economic effects are is absolutely the right way to proceed,' MacGuineas said. Republicans have long touted Trump's 2017 Tax Cuts and Jobs Act as a key contributor to economic growth, while pointing to higher revenues seen in the years since the bill's passage as evidence of the package's success and that the tax cuts have paid for themselves. But the GOP's 2017 tax law was not, in fact, a significant driver of economic growth and came nowhere close to growing the economy by an amount that would have offset its deficit additions. The law grew the economy by 0.2 percent in 2018, according to the CBO, which was the year following the tax law change when the effects would have been most pronounced. In order to offset its deficit additions, it would have needed to grow the economy by 6.7 percent, according to the Congressional Research Service — more than an order of magnitude larger than what it actually did. The 0.2 percent growth resulting from the 2017 Trump tax cuts measured by the CBO was in line with many other forecasters from the time, most of whom have been spared from the same whipping-boy treatment from Republicans that the CBO has received. Goldman Sachs and the International Monetary Fund each projected 0.3 percent growth, Moody's Analytics projected 0.4 percent growth, Barclays projected 0.5 percent growth and Macroeconomic Advisers projected 0.1 percent growth. Tax specialists and economists are generally dismissive of Republican growth claims. 'Everybody in my profession agrees with me,' Marty Sullivan, chief economist at Tax Analysts, told The Hill back in October. 'Nobody — 99 percent of economists — believes that there's going to be so much growth that it would offset any cost on any of these tax cuts.' 'You hear people saying, 'Wow, after the Trump tax cuts, we had the biggest economic growth in history' — well, we didn't,' he said. The meager additions to economic growth made by the 2017 tax law could be even less in the current law, since most of the main production provisions are not new but simply extensions of what is already in place, tax experts told The Hill. Economic growth effects of tax legislation — sometimes called 'dynamic effects' — are largest when they first appear, giving businesses new money for investment and consumers more money for spending. Over time, the effects of that initial cash infusion abate as new norms are established and additional capital is absorbed into existing production patterns. The debate over dynamic scoring is one of two major accounting controversies involving the bill, the other being whether the bill should be scored from the point of view of current law or current policy. From the perspective of current law, which expires at the end of this year, the tax cuts would add more than $5.5 trillion including interest to the national debt, according to the JCT. Republicans prefer to assume the continuation of their last eight years of policy into the future, which would allow that $5.5 trillion price tag to be ignored and for additional scoring to pertain only to changes made on top of it. More fiscal hawks have raised concern about the potential fiscal impact of the legislation in recent weeks, urging for more aggressive spending cuts to ride alongside the major tax plan. Republicans in the lower chamber have already approved major reforms to Medicaid and the Supplemental Nutrition Assistance Program, along with other programs, that have been estimated to reduce federal spending by more than $1 trillion over the next decade. Hard-line conservatives in both chambers are pushing for the party to slash spending even further, while some Senate Republicans have suggested the scope of the tax piece of the bill could be narrowed amid cost concerns. 'Why didn't Trump's 2017 Tax Cuts and Jobs Act make tax cuts permanent? Because the impact of the tax cuts on debt after 2025 was understood by THEM to be too great,' Rep. Thomas Massie (Ky.), one of only two Republicans to vote against the House bill last month, said in a post on the social platform X on Monday. 'Now they're employing new-math to claim that renewing the tax cuts, without cutting spending, won't impact debt.'
Global News
31-05-2025
- Climate
- Global News
‘We just can't have another fire in northern Saskatchewan': Premier Scott Moe says
Saskatchewan's Premier Scott Moe laid out a devastating outlook on Saturday as fires rage across the province, especially in the northern region. Moe said residents and firefighters are facing an extremely challenging situation, and every resident needs to do their part to ensure they are not contributing to or starting any new fires. 'We're in a situation where we just can't have another fire in northern Saskatchewan,' he said. Moe said everyone needs to be careful in the next four to seven days, which are critical while awaiting a possible change in weather patterns. 'In the north, we are facing an extremely dry situation,' Moe said. 'We haven't had those spring rainfalls, which we normally have, and I would say, first and foremost, these are incredibly stressful, challenging times for those that are living in the north.' Story continues below advertisement Moe said more evacuations could happen in the coming days 'if we don't see rain in the near future.' 1:56 Shoe fire fallout There are currently 16 active fires in the province with seven considered not contained. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy The largest in the province, the Shoe fire, is an estimated 305,343 hectares in size and burning in the area of Lower Fishing Lake. Saskatchewan's Public Safety Agency said the fire had prompted evacuations in Fishing Lake, Piprell Lake, East Trout Lake, Little Bear Lake and Whiteswan/Whelan Bay. The agency said valuables have been lost in the massive fire. In addition, due to the blaze, there are temporary intermittent closures of HWY JCT 913 and 106, JCT 120 and 106, JCT 912 and 913, JCT 165 and 106 by Big Sandy, JCT 120 and 913. Story continues below advertisement It has also forced the closure of Narrow Hills Provincial Park. East Trout-Nipekamew Lakes Recreation Site is closed. As of Saturday afternoon, there were 220 provincial wildland firefighters on the ground, Moe said. There were also 13 additional municipal fire departments stationed in communities helping to defend the fire lines and 66 contractors with heavy equipment on the front fire lines. Twelve Saskatchewan aircraft have been deployed to fight the blazes along with 20 to 30 helicopters, Moe added. In addition, there were 410 type 2 northern community and Indigenous firefighters on the front lines. Additional aircraft resources from Alaska, Quebec and British Columbia are also helping fight the fires. Moe confirmed there have been no fatalities in the province due to the fires.
Yahoo
30-05-2025
- Business
- Yahoo
Trump ‘Revenge' Tax Would Cut Foreign Investment, Congressional Panel Says
(Bloomberg) -- Congress's own official tax scorekeeper is predicting a 'revenge' tax buried in Donald Trump's massive fiscal package would realize Wall Street's fears and drive foreign investors away from US markets. NYC Congestion Toll Brings In $216 Million in First Four Months Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The Economic Benefits of Paying Workers to Move Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry NY Wins Order Against US Funding Freeze in Congestion Fight The item — introduced in legislation that passed the House last week as Section 899 — would increase tax rates for individuals and companies from countries whose tax policies the US deems 'discriminatory.' This includes raising tax rates on passive income, such as interest and dividends, earned by investors who are potentially sitting on trillions in American assets. Wall Street analysts are warning the provision would create another disincentive for foreign investors at a time when their once ironclad confidence in Treasury bonds and other US assets has already been shaken by Trump's erratic trade policies and the nation's deteriorating fiscal accounts. Congress's nonpartisan Joint Committee on Taxation, charged with producing official revenue forecasts for the legislation, assessed it would lead to a 'decline in foreign demand for US direct and portfolio investment' and 'general avoidance and compliance behavior' by foreign companies in response to the retaliatory taxes, Thomas Barthold, the JCT's chief of staff, said in a statement to Bloomberg Tax in response to questions about the committee's estimates. As a result of that, and its effects on US tax receipts and US asset values, revenues from the proposal are projected to decline beginning in 2028 and turn into a loss in the last years of the 10-year budget window that the JCT examined, Barthold told Bloomberg Tax. The JCT has estimated the provision will bring in $116.3 billion in revenue over the next 10 years. But the committee projected it would ultimately lower annual US tax revenues by $12.9 billion in 2033 and 2034. Barthold said the reduced profitability of foreign-headquartered companies would reduce baseline US tax receipts. He added that lower foreign demand for US investment would also reduce US asset values. Those effects 'dominate' the revenues collected under the retaliatory tax plan in the last years of the 10-year window, leading to the revenue loss, he said. For now, the market reaction to Section 899 appears muted at best. Still, US assets as a whole have been underperformers this year as Trump's policies put a dent in the narrative of the 'America exceptionalism.' Long-term Treasury yields have catapulted higher this year and the value of the US dollar has dropped by about 7%, according to the Bloomberg Dollar Index. Moody's Ratings downgrade of the US government's credit rating this month has also added to a 'Sell America' trade. Foreign investment in US long-term securities, including stocks and bonds, amounts to around $31 trillion. And while foreign accounts' share of US Treasury debt has slid in the last decade, they still hold about a third of the near $29 trillion outstanding. 'A foreign tax provision in the One Big Beautiful Bill Act is alarming,' wrote Elias Haddad, a strategist at Brown Brothers Harriman & Co. in a note. 'If the bill as presently written takes effect, it would deter foreign investment in US assets at a time when the country faces increasing reliance on foreign capital to finance its ballooning debt.' House Ways and Means Committee Chair Jason Smith, whose committee handled the measure's tax components, said he hopes the provision will serve as a deterrent to foreign governments and won't be deployed. He described the provision as an effective tool for retaliating against countries that try to crack down on US businesses. 'A big concern is that foreign governments, based on agreements entered by the Biden administration, is trying to suck away billions of dollars from US companies,' Smith said during a panel in California, referring to countries that are seeking to impose digital services taxes on large technology companies such as Meta Platforms Inc. and Alphabet Inc.'s Google. 'In fact, $120 billion from US companies. This is a way to help put them in check so that they understand if they do that to US businesses, there will be consequences for their actions.' Smith added the tax writers are hoping that punitive tax rate in Section 899 isn't imposed. 'Hopefully it'll never take effect,' Smith said. The Trump tax provision would boost the federal income tax rate on passive US income earned by investors and institutions based in the targeted countries, first by 5 percentage points, then rising by another five points each year to a maximum of 20 points above the statutory rate. YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce How Coach Handbags Became a Gen Z Status Symbol Will Small Business Owners Knock Down Trump's Mighty Tariffs? ©2025 Bloomberg L.P. 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