Latest news with #TaxCutsAndJobsAct
Bloomberg
22-05-2025
- Business
- Bloomberg
A Guide to Trump's Tax Cuts: What's in His ‘Big, Beautiful' Bill
On May 22, the US House of Representatives passed a multi-trillion dollar bill that implements President Donald Trump's domestic agenda. The legislation would extends the tax cuts implemented in Trump's first term, which were set to expire, and allocate billions of dollars to defense, immigration enforcement, and other administration priorities. The measure now moves to the Senate, which is expected to make significant changes. Here's what to know. The bill would extend most of the individual and estate provisions of Trump's 2017 Tax Cuts and Jobs Act, which are largely set to expire at the end of 2025. Those include increases to the standard deduction, a fixed dollar amount that reduces the income on which a person is taxed; lower income tax rates for most taxpayers; an increase in a tax credit that can be claimed for a dependent child; a deduction for privately held businesses; and a doubling of the amount that an individual can leave to their heirs upon death without incurring federal estate taxes.
Yahoo
14-05-2025
- Business
- Yahoo
US retailers endorse House tax package ahead of key vote
The National Retail Federation (NRF) has voiced strong support for a new tax proposal introduced by House Ways and Means Committee Chairman Jason Smith (R-Mo.), calling it a significant step for the retail sector and broader U.S. economy. The proposed legislation, which is scheduled for a committee vote, includes provisions aimed at maintaining a stable business tax framework, with a particular focus on extending key elements of the Tax Cuts and Jobs Act. Central to the bill are measures that would extend full expensing for capital investments, allow immediate expensing for research and development, and maintain enhanced interest deductibility. These provisions have been identified by the NRF as critical tools for stimulating business investment and driving job creation in the retail industry. The NRF argues that these tax incentives offer businesses greater certainty when making long-term financial decisions, which can lead to increased hiring, operational upgrades and innovation. By reducing the cost of capital, the package is seen as a means to support continued growth across retail supply chains and consumer services. One notable feature of the legislation is the absence of changes to the state and local tax (SALT) deduction for businesses. The NRF highlighted this as a key victory, emphasising that limiting the SALT deduction could have undermined the competitiveness of U.S. retailers, particularly those operating in high-tax states. By maintaining the current deduction structure, the bill avoids imposing additional tax burdens on companies and preserves what the NRF describes as a necessary tool for supporting economic resilience. The retail sector has long advocated for a consistent and transparent tax code that allows firms to plan and expand with confidence. The announcement follows a recent NRF initiative that brought over a dozen retail tax executives to Washington, D.C., to engage directly with lawmakers and administration officials. The industry group has been lobbying for the continuation of business-friendly provisions first introduced in 2017 under the Tax Cuts and Jobs Act. The NRF's support for the current proposal reflects its broader agenda of encouraging policies that foster economic growth and innovation. As discussions progress in the House, the retail sector is expected to remain an active participant in shaping tax policy that aligns with its long-term goals. "US retailers endorse House tax package ahead of key vote" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. 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
Forbes
12-05-2025
- Business
- Forbes
If Congress Expands The Child Tax Credit, Who Benefits At What Cost?
Learning, bicycle and proud dad teaching his young son to ride while wearing a helmet for safety in ... More their family home backyard. Active father helping and supporting his child while cycling outside The Child Tax Credit (CTC) delivers substantial benefits to families with children—but the credit's design means that 17 million children (about 1 in 4) live in families who miss out on the full CTC benefit because the parents—most of whom work—do not earn enough. At the end of this year, along with a host of other Tax Cuts and Jobs Act of 2017 (TCJA) individual income tax changes scheduled to expire, the maximum credit will fall from $2,000 per child to $1,000 per child under age 17. Congress could extend the $2,000 benefit and other aspects of the current CTC — and still deliver more benefits to very low-income working families than scheduled under current law. Indeed, several members of Congress have proposed alternative CTC designs to better assist families with multiple children and families with young children. The credit could also address rising costs and other issues facing working families while investing in our nation's future. In a new TPC analysis, we show who would benefit from various plans, and how much they would cost. We show that phasing in the CTC more quickly delivers benefits mostly to families with low incomes at relatively modest cost; resources can be targeted to parents of newborns with very low incomes at modest cost; and broad expansions of the credit amount are relatively costly and deliver the majority of benefits to middle- and high-income families. More details of each of these follow; additional reform options appear in our paper. Phasing in the CTC with earnings faster: Phasing in the refundable portion of the CTC starting with the first dollar of earnings, at a rate of 15 percent per child (up to 45 percent for families with three of more children), and allowing the full $2,000 to be received as a refundable credit would cost about $48.5 billion over the 10-year budget window from FY2025 to FY2034. Benefits from this change would largely be concentrated in the lowest fifth of the income distribution (Figure 1). Distribution of Benefits by Income Quintile for Families with Children Making the CTC fully refundable for families with a newborn: This would allow families to benefit from the full $2,000 credit for their newborn, even if they did not have earnings. It would cost about $7.5 billion over the 10-year budget window. That is substantially less than other proposals we evaluated since there are relatively few families with newborns and most of them already receive the full $2,000 credit. Low-income families are currently the least likely to receive the full credit; as a result low-income families with a newborn would get an estimated 86 percent of the benefits from this proposal. Extending CTC eligibility to 17-year-old children and increasing the credit to $2.500 per child under age 17: Families with incomes in the middle three income quintiles would get most of the benefits from increasing the maximum eligible age for the CTC by one year to 17 (at an estimated cost of about $57.5 billion over the 10-year budget window) and increasing the credit amount to $2,500 per child (at an estimated cost of about $229.5 billion over ten years). That's because benefits to families with 17-year-old children essentially replicate benefits of the Child Tax Credit as it is today. Making the credit larger without adjusting how the credit phases in still leaves lower-income families bumping up against phase-in rules that limit their CTCs. Research shows that delivering benefits to families with children is a sound investment, with particularly large payoffs among families with low incomes. Additional CTC options, their costs, and how much each would benefit families with children is available here. Policymakers can select which one fits their policy goals and budget constraints.
Forbes
25-03-2025
- Business
- Forbes
South Carolina Goes From Tax Cut Laggard To Leader Under New Proposal
The South Carolina Statehouse in Columbia, S.C. COLUMBIA, S.C. — 2025 is a big year for tax reform and the work now being done on Capitol Hill to extend the tax relief enacted in 2017 as part of the Tax Cuts And Jobs Act is not the only reason that's the case. With one week until the end of the first quarter, legislation to cut income taxes has been enacted in nine states and Michigan is poised to become number 10 with a bill reducing the state's flat income tax from 4.05% from 4.25%. That tax cut, which would retroactively take effect January 1, 2025, passed out of the Michigan House of Representatives on March 18 by a vote of 65-43 and will soon be taken up by the state senate. Of all the income tax cuts that have been introduced in state capitals so far this year, one that might make the most significant improvement to a state tax climate is the one introduced today by South Carolina House Speaker Murrell Smith (R-Sumter) and his statehouse colleagues. Under the tax plan announced at a press conference at the state capitol, South Carolina would go from having the highest personal income tax rate in the region to the lowest outside of the no-income-tax states. The tax plan unveiled by Speaker Smith, filed as House Bill 4216, would move South Carolina from a progressive income tax code with a top rate of 6.2% to a 3.99% flat rate next year. H. 4216 also schedules further rate reductions for the next few years contingent upon revenue triggers. So long as revenue collections meet specified targets, South Carolina's income tax rate could fall further, dropping as low as 2.49%. With Speaker Smith's proposal, South Carolina would leapfrog neighboring Georgia and North Carolina in the tax rankings to boast a lower rate than the two neighboring states, which many see as South Carolina's top competitors for job-creating investment. In fact, if H. 4216 is enacted and revenue triggers are met, South Carolina would go from having the highest income tax rate in the Southeast, to the lowest rate in the nation, besting Arizona's 2.5% flat tax. Enactment of H. 4216 would have South Carolina matching or exceeding the rate reduction enacted in many other Republican-run states in recent months and years. Unlike many of those income tax rate-reducing plans, however, Speaker Smith, House Ways & Means Committee Chairman Bruce Bannister (R-Greenville), and their colleagues are facilitating income tax rate reduction without applying the sales tax to previously untaxed services. Instead, H. 4216 brings the income tax rate down using nearly a third of the ongoing budget surplus, along with new revenue derived from changing the way in which South Carolina's tax code conforms to the federal tax code. South Carolina is currently one of only five states that use federal taxable income as the basis for state taxation. H. 4216 broadens the tax base by switching to federal adjustable gross income (AGI), which is the basis used by 32 other states, including Georgia and North Carolina. Under H. 4216, all additional revenue collected on that broader tax base is plowed into rate reduction for all taxpayers. 'State income taxes are best applied to a broad base with a low, flat rate (at least until it's zeroed out)," said Ryan Ellis, an IRS enrolled agent who runs a tax preparation business and is president of the Center for a Free Economy. 'AGI's broader definition of income is used by most states for a reason—it's a more accurate definition of income, and it gets the states out of the deductions business.' 'The Speaker's plan is a dream come true for us,' said Palmetto Promise Institute Senior Fellow Dr. Oran Smith. 'His bill is consistent with recommendations our scholars have been making since 2014. Low. Flat. AGI. It has all the elements of sound, pro-growth tax policy.' Joining Speaker Smith at this morning's press conference announcing the new tax plan were Senate President Thomas Alexander (R), Senate Finance Committee Chairman Harvey Peeler (R), and Governor Henry McMaster (R). During his press conference remarks, Governor McMaster called on legislators to get a bill cutting the state income tax to his desk before adjourning the current session, which is scheduled to end May 8. 'I'm so proud of us to continue working together both House and Senate, Finance and Ways and Means to make this happen, and not just end this today on income tax, but also address sales tax and property tax, we need to lower both too,' Senator Peeler said at the press conference, during which he indicated that the Senate may have additional tax-cutting ideas to contribute to the final product. 'There's nothing this team can't do working together,' Peeler added. The tax plan announced at the South Carolina statehouse today — aside from making the Palmetto State an even more attractive place to live, do business, and invest — is the latest example demonstrating how South Carolina, though it has long been considered a deep red state, has only recently begun to implement major conservative reforms. Not only is South Carolina now catching up to other red states, it is even surpassing them in some areas. The plan is for the House to pass H. 4216 in the coming weeks, at which time it will be up for Senate consideration and likely modification. If H. 4216, or something like it, is enacted this year, South Carolina will go into the second half of the 2020s with a far more competitive tax climate.
