FY25 IRS Budget/2024 Tax Season

 Finance: The President’s Fiscal Year 2025 IRS Budget and the IRS 2024 Filing Season, April 16, 2024

As I mentioned the last two  years, support contractors could be more widely used for customer and information technology services. This would identify the balance of spending to justify the budget request for FY 2025.

Additional analytical resources are required for tax reform initiatives such as a Fair Tax initiative and exploration of options due to expiration of the Trump/Ryan/Brady tax cuts. The Ways and Means Committee and the Committee for a Responsible Federal Budget are agitating for a Fiscal Commission to justify or pay for some kind of extension of the 2017 Tax Bill. 

While such an extension should be allowed to die on the vine, analytical resources should be budgeted for the debate and a consideration of alternatives, such as those presented last year to the Ways and Means Committee. My comments on those alternatives, plus a presentation of my own, are attached.

This year, the House has passed a reboot of the pandemic era child tax credit distribution. This will require more funds, although with tax reform, this could be done more cheaply. Such a change is essential in a post-Roe environment. If women must keep their pregnancies, then they must be funded adequately to raise the child to maturity.

To prevent the “stink of welfare” that Senator Manchin so objects to, CTC payments should be included with wages for all employees - not just those with three or more children. They should also be distributed through other federal and state assistance programs - some of which can be reduced to do so.

For middle income taxpayers whose increased credits are less than their annual tax obligation, a simple change in withholding tables is adequate. Procedures are already in place to deliver refundable credits to larger families. For the coming year, they merely need to be expanded to all families with children. 

Employers can work with their bankers to increase funds for payroll throughout the year while requiring less money for their quarterly tax payments (or estimated taxes) to the IRS. The main issue is working out those situations where employers owe less than they pay out. This is especially true for labor intensive industries and even more so for low wage employers. 

A higher minimum wage would make negative quarterly tax bills less likely. Indeed, no one should have to subsist mainly on their child tax payments.

As usual, we have attached the latest version of our tax reform plan, with a separate attachment on how implementation of this plan would affect IRS manpower. The answer is that the change would be drastic. It would also allow the Committee to focus more on how social welfare is being delivered in general, as well as eliminating current roadblocks to promptly filing for Social Security Disability Income.

Attachment; Tax Policy Options

Attachment: Tax Reform Videos included

Attachment: Tax Administration Video