Legislators in seven states have proposed higher taxes on the wealthy for 2023. Lawmakers in New York, Maryland, and Hawaii propose to strengthen estate taxes. In Connecticut, New York, Maryland, and Hawaii, there are proposals to tax realized capital gains. Still other proposals in California, Illinois, New York, and Washington would tax unrealized capital gains. The proposed wealth tax in California would target worldwide net worth in excess of $1 billion, and it would apply even to residents who move to other states. Will these taxes narrow income equality, as their sponsors assert? Will they discourage entrepreneurialism and investment? Are they constitutional?
President Biden and Congress increased the IRS budget by $80 billion over 10 years under the Inflation Reduction Act. Learn how the IRS plans to use this funding to support taxpayer services, modernize the agency, and enhance compliance. Will additional agents increase the auditing of complex tax returns? Will increased audits affect the general public more than policymakers might have intended? Will the IRS use the funding more to increase compliance than to improve taxpayer service? How can the funding be used to solve some of the problems faced by taxpayers in the last few filing seasons? And is future annual funding at risk under the new Congress?
The new 1 percent excise tax on stock buybacks, established by the Inflation Reduction Act, is designed to curtail incentives for corporations to use stock buybacks to boost share prices. The tax has generated many questions about how it will work, confusing practitioners and concerning taxpayers. What will qualify as a repurchase? How will special purpose acquisition companies be affected? And how will fair market value be determined?
As the OECD continues to plan pillars 1 and 2, some countries have delayed or halted their efforts to conform. While the United States has enacted a 15 percent corporate minimum tax, the tax does not satisfy pillar 2. How viable is this proposed new international tax regime without U.S. participation? Can it work without a U.S. and EU consensus?
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