| | | | |  | | By Bernie Becker | | | With help from Benjamin Guggenheim HOW FAIR WE TALKING? More mainstream organizations on the right have been disdainful about the Fair Tax — the plan for a national sales tax — for years now. But groups like Americans for Tax Reform and The Wall Street Journal editorial page have only gotten more aggressive since news broke that the House would allow a vote on the Fair Tax, as one of the concessions that Speaker Kevin McCarthy made to clinch the job. The basic take from the more mainstream right is nothing good and only bad can come from a Fair Tax vote — so what's the point, exactly? But it's worth drilling down a bit further, too. Groups like ATR argue both that giving the Fair Tax this kind of oxygen is a political gift to Democrats, and that the Fair Tax is essentially a crank idea opposed by the overwhelming majority of GOP lawmakers. To some, there's a bit of tension between those ideas — how much of a gift can the Fair Tax be if it's such an outlier among Republicans? MORE ON THAT IN A BIT, after we thank you for joining us for more Weekly Tax. Also feeling thankful these days: Bunnies who get put up in luxury rabbit resorts, especially now that it's the Year of the Rabbit. Was it, in fact, the dawning of? Today marks 26 years since the Sun, the moon and some of the planets perfectly lined up into a six-pointed star. It was the first time that had happened in more than 500 years, and astrologers believed it ushered in the Age of Aquarius. (Astronomers weren't as impressed.) Help us let the sun shine in. Send your best tips and feedback. Email: bbecker@politico.com, bfaler@politico.com, bguggenheim@politico.com and teckert@politico.com. You can also reach us on Twitter at @berniebecker3, @tobyeckert, @brian_faler, @ben_guggenheim, @POLITICOPro and @Morning_Tax.
| | | | A message from Intuit, serving more than 100 million customers worldwide with TurboTax, QuickBooks, Credit Karma, and Mailchimp: Taxpayers can use this tax season to take control of their financial future. For millions of Americans, tax refunds are a chance to look closer at their full financial picture. Often a family's largest check of the year, tax refunds allow people to pay down debt, bolster savings, or cover critical expenses. Intuit TurboTax consolidates more than 6,000 pages of federal tax law to help navigate the complex and ever-changing tax landscape. Learn more. | | | NOT AS HARD AS YOU THINK: But those two notions are actually quite easy to reconcile, argued Grover Norquist, ATR's founder, who compared the Fair Tax to Sen. Rick Scott's proposal last year to force more people to pay income taxes. President Joe Biden then quickly latched on to that suggestion, and Democrats tried to make it a campaign issue in the midterms. "People got asked about that as if it was the Republican position. It was from one guy," Norquist said. Along those lines, another Republican pointed out that the conservatives who get into the Fair Tax are very passionate about it. So even giving this much attention to the Fair Tax risks causing even more schisms among Republicans — or to allow grassroots supporters to shake their fists at the establishment opponents standing in the way. Looking ahead: These opponents of the Fair Tax believe that the proposal from Rep. Buddy Carter (R-Ga.) can effectively be bottled up in the Ways and Means Committee, where only a couple of Republicans are on record supporting the idea. After all, one of the demands from the insurgents working against McCarthy was that the House better respect regular order. With that in mind, some Republicans believe ATR and the other Fair Tax opponents are worrying too much about any political problems, even if they get the instinct to come out swinging against ideas that would make GOP lawmakers sweat if they hit the House floor. But Norquist seems interested in essentially salting the earth against the Fair Tax, telling Weekly Tax that he'll be lobbying the roughly two dozen House Republicans on the bill to publicly distance themselves from it if and when it fails. Otherwise, Norquist said, the Fair Tax could again distract from one of Republicans' primary purposes — to push for income tax cuts when they control the government, and oppose income tax increases when they don't.
| | | | JOIN POLITICO ON 2/9 TO HEAR FROM AMERICA'S GOVERNORS: In a divided Congress, more legislative and policy enforcement will shift to the states, meaning governors will take a leading role in setting the agenda for the nation. Join POLITICO on Thursday, Feb. 9 at World Wide Technology's D.C. Innovation Center for The Fifty: America's Governors, where we will examine where innovations are taking shape and new regulatory red lines, the future of reproductive health, and how climate change is being addressed across a series of one-on-one interviews. REGISTER HERE. | | | | | 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. CHUGGING ALONG: How might that new $80 billion in funding actually help taxpayers trying to deal with the IRS? Well, Treasury is trying to count the ways. Wally Adeyemo, the deputy Treasury secretary, told reporters that the agency will be rolling out a new digital option for small business owners filing out those 1099-K forms from third-party platforms like PayPal or Venmo. The IRS had already said that it had hired 5,000 new customer service representatives ahead of the new tax filing season, and Adeyemo added in his recent briefing that taxpayer assistance centers will be fully staffed as well. Dozens of those centers will be holding special events each month to provide in-person assistance to tax filers in need, Adeyemo noted. And then there are the paper returns Erin Collins, the national taxpayer advocate, has called the IRS's "kryptonite." Adeyemo said the agency is moving forward on automating the scanning of millions of individual paper returns with the Inflation Reduction Act money, something that a separate Treasury official said could prevent a future repeat of the paper influx that buried the IRS during and after the pandemic. "The IRS currently enters numbers from paper returns into its computers one digit at a time. They've been doing that since the 1970s," Adeyemo said. The separate Treasury official added that the IRS will be figuring out its implementation timeline for the scanning this year, now that the agency has located an outside vendor to run the automation and tested the system for scanning. As it stands, three IRS offices around the country process all the paper returns sent to the agency. But the new scanning system will enable IRS workers to pitch in on sorting through the returns no matter where they're physically located. Final note: Remember that full battle plan for the $80 billion in funding that Treasury Secretary Janet Yellen said should be done by next month? Treasury and IRS officials, as well as other interested parties, are meeting on a weekly basis to discuss what should be included in the plan and how the funding will help rein in the tax gap — with the goal still to get the final report to Yellen by February, according to the Treasury official. Further reading: "U.S. Treasury's Yellen says IRS needs to be 'completely redone,'" via Reuters.
| | | |   | | | | | | Bloomberg: "Labour Would Expand Windfall Tax to Freeze Energy Price Cap." BBC: "Nadhim Zahawi: Tax error was careless and not deliberate." Bloomberg Tax: "OECD Should Modify Restrictions on Digital Taxes, Group Says."
| | | | DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don't miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID. | | | | | | | | San Francisco Chronicle: "Why California is urging people who got middle class tax refunds to withdraw the money ASAP." Minneapolis Star-Tribune: "No neighboring states tax Social Security. Minnesota Democrats face pressure to eliminate it here." The Center Square: Gov. J.B. Pritzker of Illinois "Not 'focused' on bringing progressive tax back to voters."
| | | Pro Tax: "Treasury study shows stark racial differences in tax breaks, credits." Reuters: "Unions press Biden administration to not change EV tax credit rules." Bloomberg: "Trump Drops NY Tax Return Fight Because GOP 'Has No Interest."' The Fifth Dimension, which released the album "The Age of Aquarius" in 1969, started as The Versatiles.
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