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Delivered every Monday by 10 a.m., Weekly Tax examines the latest news in tax politics and policy.
Oct 17, 2022 View in browser
 
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By Bernie Becker

COMING TO A TELEVISION NEAR YOU: If you live in an area getting a lot of campaign ads, chances are you might be seeing a lot of GOP attacks against the Democrats' big funding increase for the IRS.

Those spots aren't totally on the up and up, not that campaign ads always are. (For starters, Republicans consistently have exaggerated how many new revenue agents the $80 billion in new IRS funding would help to hire.)

But the millions of dollars that the GOP is spending in the key battleground states and districts, in places like Arizona, Georgia and Nevada, shows that Republicans believe the IRS funding boost helps drive home one of their key messages — that Democrats have had the wrong priorities during their two years with full control in Washington, as Pro Tax's Brian Faler reports.

For their part, Democratic strategists say they don't think the IRS attacks will damage their candidates all that much, basically arguing that the party opened itself up to the criticism that it didn't focus enough on inflation — but that going after their efforts to crack down on wealthy tax cheats isn't the best way to drive that point home.

And of course, don't forget: Most likely, this isn't just a campaign focus for Republicans, either.

There quite possibly will be a battle in the years to come over reining in IRS spending through the regular appropriations process, beginning as soon as next year if or when Republicans pick up one or two congressional chambers in November.

And Republicans have prepared a number of measures that would put limits on the new $80 billion, not to mention the vow from Minority Leader Kevin McCarthy to roll back that funding if the GOP takes the House.

MORE ON ALL THIS IN A BIT, but first thanks for coming back for more Weekly Tax. Fingers crossed: Do you think they'd make a sequel out of babka ?

More than just halfway there: Today marks four years since Canada legalized recreational cannabis.

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AIN'T THAT SPECIAL: Here's perhaps a sign that the hullabaloo over the new British government's tax cuts is breaking more into the mainstream — President Joe Biden was asked about it over the weekend, in Oregon of all places.

And Biden didn't hold back , raising some eyebrows here in the States and leaving some Britons peeved that he had so sharply criticized Prime Minister Liz Truss' domestic agenda.

The president did say that British voters would decide if they liked the kind of tax cuts offered by Truss, though the prime minister has dropped some of the more aggressive tax relief ideas first floated by her government.

"I wasn't the only one that thought it was a mistake," Biden said about the proposed U.K. tax cuts, which led to Truss sacking her chancellor of the exchequer, Kwasi Kwarteng, and perhaps has her just barely holding onto the prime minister job.

There may be more to come, too: Great Britain has now had four separate chancellors since the Fourth of July.

And the latest, Jeremy Hunt, is signaling that he might be interested in further dialing back the government's plans for tax cuts. The Conservative government had dropped the idea of scrapping the top 45 percent individual income tax bracket while Kwarteng was still chancellor.

Then Truss said on Friday, the same day that she fired Kwarteng, that the government wouldn't stand in the way of a planned increase in the corporate tax. And Hunt, while also saying that the Conservative mini-budget that unleashed all these tax cuts went "too far, too fast," is also planning to push back a planned 1 percentage point cut in the income tax.

KEEPING THE GLOBAL VIEW: Here's another area where the U.S. and the U.K. aren't on the same page on taxes these days — Biden and his team played a key role in striking the global tax deal, while Truss is seen as far more skeptical of that effort.

One of the key architects of that plan, Pascal Saint-Amans, is leaving the Organization for Economic Cooperation and Development, where he led the group's tax policy center, for the private sector in the next couple weeks.

The Financial Transparency Coalition called out both Saint-Amans and the OECD last week, arguing that Saint-Amans' departure for the Brunswick Group raised lots of questions about potential conflicts of interest and that the OECD needs to toughen up rules regarding a "cooling-off" period for departing officials.

For his part, Saint-Amans said that he purposely chose a communications firm for his next job, instead of going to work for a tax and accounting firm. The OECD's secretary-general, Mathias Cormann, echoed that defense in a statement, while seemingly brushing aside the question of whether the group had broader issues with revolving door matters.

"We came to the view that there was no conflict of interest between his position at the OECD and his new role in the private sector," Cormann said.

PERSONNEL ANNOUNCEMENTS: Senate Finance Chair Ron Wyden (D-Ore.) has handed out some promotions after his panel played a key role in crafting and advancing the Inflation Reduction Act.

Tiffany Smith, the Democrats' chief tax counsel on the committee for six years, will now serve as general counsel. Bobby Andres, formerly a senior policy advisor, will now lead the Finance panel's tax team as chief tax advisor. And Ashley Schapitl, the chief communications advisor to Wyden, is now senior policy advisor, while Chris Arneson will be chief budget and economic advisor.

 

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Around the World

Reuters: " Argentina to give workers income tax relief from November."

AFP: " Iraq Probes $2.5 Billion 'Theft' From Tax Agency."

Reuters: " Austria considers windfall tax on energy companies."

Around the Nation

From up in Gotham: Mayor Eric Adams " releases first tax returns as mayor."

Dallas Morning News: " Dallas voters could raise hotel taxes in November . How much you pay depends where you stay."

Adirondack Daily Enterprise: " Lawmakers eye gas tax 'holiday' extension. "

Quick Links

The Hill: " Major companies race to buy back stocks ahead of new corporate tax."

WSJ: " Lyft Battles Gavin Newsom Over California Measure to Fund EVs."

NYT: " After Weeks of Turmoil, U.K. Markets Face Another Test on Monday."

Did you know?

Canada legalized medical marijuana in 2001.

 

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