How Will New Legislation Affect Your Taxes?
As the Inflation Reduction Act moves to the House of Representatives, it is important to know how it will affect you if it becomes law.
From Fox News. White House economic adviser Jared Bernstein appeared on CNBC’s Squawk Box Monday and was interviewed by host Brian Sullivan, who questioned him about the impact the Inflation Reduction Act will have on taxpayers.
If passed by the House of Representatives and signed into law by President Joe Biden, the legislation would add 87,000 IRS agents….
“I want to be clear, is the president guaranteeing nobody making under $400,000 will be audited [by the new agents]?” asked Sullivan.
“No, no, no. That’s not what I said. Nobody making under $400,000 will pay higher taxes under the Inflation Reduction Act,” Bernstein said….
However, Fox News reported that according to the nonpartisan Joint Committee on Taxation (JCT), Bernstein’s pledge is not true. According to the JCT, Americans making less than $10,000 per year would see a 0.3% tax hike starting in 2023. Overall, starting in 2023, taxes would increase by $16.7 billion for Americans earning less than $200,000….
From Fox News. Americans who earn less than $75,000 per year are slated to receive 60% of the additional tax audits expected under Democrats’ spending package, according to an analysis released by House Republicans.
The analysis, which is a conservative estimate based upon recent audit rates and tax filing data, shows that individuals with an annual income of $75,000 or less would be subject to 710,863 additional Internal Revenue Service (IRS) audits while those making more than $1 million would receive 52,295 more audits under the bill. The legislation, the Inflation Reduction Act, would roughly double the IRS’ budget to increase enforcement and, therefore, federal tax revenue….
Overall, the IRS would conduct more than 1.2 million more annual audits of Americans’ tax returns, according to the analysis. Another 236,685 of the estimated additional audits would target individuals with an annual income between $75,000 and $200,000….
The legislation doesn’t explicitly guarantee that Americans making under $400,000 won’t see tax increases under the IRS provision. The bill states that it is not “intended” to increase rates for taxpayers who aren’t in the top 1% of earners.
“There is language in this bill that provides some guidelines, but it’s not at all a guarantee,” William McBride, the vice president of federal tax and economic policy at the nonpartisan Tax Foundation, told FOX Business in an interview. “It indicates that the intent of the increased spending is not to target those earning less than $400,000. But intent is a somewhat squishy word.”
“The fact of the matter is most returns report income under $100,000,” he continued. “That’s where the money is, so to speak….”
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