| | | | |  | | By Bernie Becker | Presented by Jackson Hewitt | With help from Kate Davidson GOING FOR IT: President Joe Biden releases his second budget today — and one of the big ideas to leak out early is a big new tax on the rich. That would be what the White House is dubbing the " Billionaire Minimum Income Tax," as Pro Tax's Brian Faler reported, after the new proposal was scooped by The Washington Post. Here's how it would work: The top 0.01 percent of taxpayers would have to pay at least 20 percent in taxes — but not just on their ordinary income, of which many among the uber-rich can make a comparatively modest amount. Instead, the administration proposal would also combine in the unrealized gains of the very wealthy, like the swelling of their stock portfolios. (Ever heard of "buy, borrow, die," for instance?) By the administration's math, that proposal will bring in an extra $360 billion over 10 years. But more than that, it also underscores that a range of leading Democrats are trying to squeeze more taxes out of the holdings of the billionaire class, but still are striving to figure out how exactly to do so. MORE ON THAT IN A BIT, but first thanks for coming back for "honestly, a pretty rewarding weekend of sports" version of Weekly Tax. Now, what if the real crime was Johnny Carson's pants : Today marks 48 years since a streaker, um, streaked across the set of NBC's "The Tonight Show." (As it happens, the person running while not clothed was a "Tonight Show" writer, who then happened to play Big Enos in "Smokey and the Bandit" a couple years later.) Know anything germane to taxes? We'd love to know about it. Email: bbecker@politico.com, alorenzo@politico.com, bfaler@politico.com and teckert@politico.com. You can also reach us on Twitter at @berniebecker3, @aaronelorenzo, @tobyeckert, @Brian_Faler, @POLITICOPro and @Morning_Tax.
| | | | A message from Jackson Hewitt: For millions of hard-working Americans, Jackson Hewitt is the front door to the tax ecosystem. Over our 35 years in business, we have gained deep insights about how people experience and navigate the complexities of the U.S. tax code. We are committed to working with colleagues, competitors, and regulators to create a better system for all. See what we're doing: jacksonhewitt.com/betterforall | | | BACK TO THE BUDGET: The new Biden proposal essentially forces the very rich to cough up the difference between their tax bills on income and unrealized gains and 20 percent, but offers some leeway — like giving five years to pay on any new gains going forward and nine years for already accumulated unrealized income. Meantime, both Senate Finance Chair Ron Wyden's yearly tax on unrealized gains and Sen. Elizabeth Warren's wealth tax have the same overriding goal, but work differently. On some level, there's probably still time to work through those differences. Key Democrats like House Speaker Nancy Pelosi and Sen. Joe Manchin (D-W.Va.) have been skeptical of at least one of the leading proposals, either publicly or privately. (Though honestly — it's fair to say Manchin has gone back and forth on the idea.) Republicans also are expected to do fairly well in November's elections — and if they win back at least one chamber in Congress, it's far from clear when Democrats might next have a chance to try to put these kinds of ideas into action. In the meantime, experts sympathetic to the idea of taxing more of the unrealized gains of the super wealthy aren't on the same page, at least yet, on which of the prevailing ideas might be most workable, as The Washington Post's Jeff Stein pointed out. And then there's the question of whether any of this passes constitutional muster. Legal experts particularly had their doubts that Warren's wealth tax would make it through the courts unscathed, but there's no consensus about whether any of these proposals are the kind of direct taxes that the Constitution forbids. The BBB angle: The latest Biden budget comes as Democrats are trying to salvage their potential measure to hike taxes on the rich and corporations, install new energy provisions and reduce deficits. The president is set to widely endorse the goals of what was once known as "Build Back Better," but won't delve much into the details — so as to not upset any ongoing negotiations, as Bloomberg's Justin Sink reported. And yet: Ahead of Monday's budget release, the White House is stressing that "fiscal responsibility" is a major theme of this budget — in a message that the administration must hope will at least appeal to Manchin, if it's not specifically aimed at him. "Through a new Billionaire Minimum Income Tax and other measures, budget policies will build on this progress and reduce deficits by a total of over $1 trillion over the next decade," the statement added. Want to hear more about the budget? Join us today at 3:30 p.m. as our policy reporters, including Morning Money author Kate Davidson, discuss President Joe Biden's budget request and prospects for fiscal 2023. Register now.
| | | | SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today. | | | | | Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. GREAT SCOTT: It's now been more than a month since Sen. Rick Scott (R-Fla.) released his policy vision that included ensuring that more people have "skin in the game" — i.e., pay at least something in income tax. GOP leaders weren't exactly thrilled with Scott for that proposal, and particularly the idea of perhaps raising taxes on millions of people. But Scott doesn't seem to be backing down — some people "have figured out how to have government pay their way. That's not right. They ought to have some skin in the game. I don't care if it's a dollar," Scott said on "Fox News Sunday." The response: Democrats haven't been shy in highlighting Scott's vision, particularly on taxes. The latest, from the Center for American Progress: Scott "focuses exclusively on the years of the coronavirus pandemic; he ignores all taxes other than the federal income tax; and he narrowly defines who counts as a taxpayer," wrote Nick Buffie.
| | | |   | | | | | | EVERYWHERE A TAX GAP: A parliamentary committee in the U.K. is advising Her Majesty's Revenue and Customs to tread carefully when seeking to collect owed taxes, The Independent reports. The Public Accounts Committee found in a new report that British taxpayers still owed 39 billion pounds to HMRC, more than double the pre-pandemic levels of 16 billion pounds — though also well below the 67 billion pounds from August 2020. The chair of that committee, Dame Meg Hillier, said the U.K. tax collector "has a tricky balance to strike" as it seeks to eat into the tax gap. "Those least able to afford rising bills, including tax bills, are also the easiest collection 'targets,'" Hillier said. Right now, more than 6 million people in the U.K. have an uncollected tax debt, but only about 1,400 are in an HMRC program that offers extra support to those taxpayers. The HMRC also hasn't expanded the number of taxpayers it views as vulnerable and potentially eligible for extra assistance, despite the PAC estimating that the number of adults who could be classified as such has risen 15 percent. The British government is setting aside an extra 62 million pounds to help HMRC deal with the increased tax debt, and the tax collector says it's hiring an extra 2,000 staffers to assist in the effort.
| | | WE GOT A DEAL: GOP officials in Mississippi agreed on a tax-cut plan over the weekend after months of trying to bridge their differences, The Associated Press reports. The proposal, which would be phased in over four years, would cut the top individual income tax rate of 5 percent to 4 percent and exempt up to $36,600 in income for married couples from being taxed. In all, the tax cut is projected to reduce revenues by $185 million in its first year before rising to $525 million once fully implemented. Both the state House and Senate are expected to pass the tax-cut legislation without much issue in the coming days. The agreement means that key GOP officials, like Gov. Tate Reeves, fell short on their goal of scrapping the state's income tax altogether. But those Republicans vowed to keep pushing toward that end goal, even as they praised the agreement reached on Saturday. Other Republicans like Lt. Gov. Delbert Hosemann had worried that eliminating the income tax, which supplies about a third of Mississippi's revenues, would mean too much of a hit to state services.
| | | | DON'T MISS POLITICO'S INAUGURAL HEALTH CARE SUMMIT ON 3/31: Join POLITICO for a discussion with health care providers, policymakers, federal regulators, patient representatives, and industry leaders to better understand the latest policy and industry solutions in place as we enter year three of the pandemic. Panelists will discuss the latest proposals to overcome long-standing health care challenges in the U.S., such as expanding access to care, affordability, and prescription drug prices. REGISTER HERE. | | | | | | | | WSJ: "IRS Delays, Sudden End to Tax Break Leave Employers Frustrated With Covid Credits." NYT: "Tax Troubles for Some Investors in Vanguard's Target Date Funds." Forbes: "Oscar Nominees Pay Tax On $140,000 'Gifts' — IRS Form 1099 Says No Gift."
| | | Cal Ripken's record streak of playing in consecutive major league baseball games ended at 2,632.
| | | | A message from Jackson Hewitt: For nearly four decades, we have focused on one mission: helping the hardest working Americans navigate the complex U.S. tax code. We are the front door to the tax ecosystem for the more than 1.8 million taxpayers we serve each year. We are also on the front lines of seeing how taxpayers respond to the complexity of the tax code.
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