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Senior House Democrats are coalescing around a draft plan that could raise as much as $2.9tn to pay for most of President Joe Biden’s sweeping expansion of the social safety net by increasing taxes on the wealthiest corporations and individuals. The preliminary proposal would see the corporate rate rise to 26.5%, with the top rate for individuals boosted to 39.6%, a 3% surtax on people making more than $5m, and the top capital gains rate lifted to 28.8% from 23.8%. The plans, aimed for a Ways and Means Committee vote later this week, will face challenges as Democrats try to determine how far they are willing to go in reversing the 2017 tax cuts and imposing stiffer burdens on corporations and high-income households. Some Senate Democrats, including Joe Manchin of West Virginia and Mark Warner of Virginia, have said they don’t want to raise the corporate tax rate above 25% from its current 21%. The Biden administration’s capital-gains plan has been facing sustained opposition from rural Democrats. The administration plan would impose taxes on unrealized gains at death, with a $1m per-person exemption and special rules to protect farms and family owned businesses.

 

New York Times

Politico

Reuters

Wall Street Journal

The IRS' strategy for examining claims for the Earned Income Tax Credit (EITC) are falling short, with nearly one-fourth of payments estimated to be wrong last year and the IRS focusing its efforts disproportionately on some Southern states. A new TIGTA report said the IRS estimated that 23.5% ($16bn) of EITC payments were issued improperly in fiscal year 2020. While the EITC helps keep millions of families out of poverty every year, it also accounts for an estimated $27bn, or 11%, of the individual income underreporting tax gap and has made up nearly 31% of all IRS audits in the last 10 years. TIGTA’s analysis of the IRS’s examinations of EITC claims also showed that its audit selection process appeared to be disproportionate in a number of Southern states, with Mississippi, Louisiana, Alabama, Georgia, Tennessee, South Carolina, North Carolina, Texas and Arkansas ranking at the top. 

 

Accounting Today

The IRS has issued a reminder that the cost of home testing for COVID-19 is an eligible medical expense. The cost can be paid or reimbursed under health flexible spending arrangements, health savings accounts, health reimbursement arrangements, or Archer medical savings accounts. The agency added that costs of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes are similarly eligible expenses if used primarily to prevent the spread of COVID.

 

Accounting Today

Fox News

Former President Donald Trump has gotten a $300,000 property tax cut this year because Cook County Assessor Fritz Kaegi slashed the value of the Trump International Hotel & Tower’s vacant retail space along the Chicago River. Mr. Trump paid slightly more than $1m in property taxes last year on the three levels of retail space in the downtown skyscraper.  His tax bill this year is $698,399 after Kaegi’s office lowered its estimation of the building’s value. It reconsidered that figure after Trump lawyer Patrick McNerney challenged the $19.9m value that Kaegi’s staff originally put on the unfinished space for retail stores in the building.

 

Chicago Sun-Times

A former employee of a local unit of Swedish telecommunications equipment maker Ericsson has been charged by the U.S. Department of Justice with attempting to bribe Djibouti government officials in order to win business with a state-owned telecommunications firm. U.S. authorities say former Ericsson Egypt employee Afework Bereket helped arrange $2.1m in bribes to at least three Djibouti officials so Ericsson could secure a €20.3m (US$24m) contract. The indictment references an email where prosecutors said Bereket urged that one payment be made "ASAP" because "[e]verybody in the management of [the telecommunications company] & in the ministry are waiting their part of the cake."

 

Reuters

A new chief compliance officers has been appointed by Credit Suisse  five months after the Swiss lender sacked at least seven senior executives in the wake of twin crises at Archegos Capital and Greensill Capital. Rafael Lorenzo, who has run the bank’s internal audit division since 2017, will take over from Lara Warner, who was global risk and compliance chief of Credit Suisse until the wave of top departures in April. Thomas Grotzer, general counsel for the bank’s Swiss business, had held the position on an interim basis since Warner was forced out.

 

Financial Times

Reuters

Eric Rosengren and Robert Kaplan, the leaders of the Boston and Dallas Federal Reserve Banks, have said they would sell off individual stocks they own, invest the proceeds in diversified indexed funds or cash savings and cease trading in individual securities. Both men defended their actions as consistent with their respective bank’s code of conduct policies, but said they didn’t wish to create any perception that their trading of securities and investments would conflict with their role in setting monetary policy. 

 

CNBC	Wall Street Journal

Student debt has grown significantly over the past several decades in the U.S. The Federal Reserve estimates that, in the second quarter, Americans owed $1.73tn in student loans, a 3% annual increase despite a lengthy pause on federal student loan interest rates and the elimination of billions of federally held student loans by the Biden administration. WalletHub recently compared the 50 states and the District of Columbia based on 11 measures of indebtedness, including average student debt totals and earning opportunities,  to determine which states struggle the most with student debt. They identified West Virginia as the state most impacted by student debt, with data suggesting that borrowers from the state experience some of the worst ratios of student debt to income, even when adjusted to account for the local cost of living. The second worst state for student debt holders is New Hampshire, while the least serious student debt difficulties could be seen in California and Utah. 

 

CNBC

Mastercard has agreed to buy blockchain analytics company CipherTrace, which sells cryptocurrency anti-money laundering services, as the payments company deepens its bet on digital assets. Based in Menlo Park, California, CipherTrace develops tools that help businesses and law enforcement root out illicit digital currency transactions. The deal comes after Mastercard announced in February that it would start supporting selected cryptocurrencies directly on its network this year. “Digital assets have the potential to reimagine commerce, from everyday acts like paying and getting paid to transforming economies, making them more inclusive and efficient,” said Ajay Bhalla, president of cyber and intelligence at Mastercard. “With the rapid growth of the digital asset ecosystem comes the need to ensure it is trusted and safe. Our aim is to build upon the complementary capabilities of Mastercard and CipherTrace to do just this.”

 

CNBC	Financial Times

The Biden administration’s order that most U.S. companies mandate that their workers get vaccinated or tested weekly for COVID-19 split the business community. While many say they support the government’s goal of speeding the pace of vaccinations to keep the recent surge in U.S. cases from hampering the economy, others still have questions about the timeline for implementing the new rules and are waiting for details about how employers could access COVID tests for employees and how they should monitor results. The Business Roundtable, which counts the chief executive officers of dozens of the biggest U.S. companies as members, said: "Over the past several weeks many companies have decided to implement a vaccine mandate for some or all of their employees, a decision we applaud.” However, the Consumer Brands Association, whose members include General Mills and Procter & Gamble said President Biden’s announcement raises questions that will require clarification. “Throughout the Covid-19 pandemic, government has often failed to implement well-intentioned policy,” the group’s president, Geoff Freeman, said in a statement. “As with other mandates, the devil is in the details. Without additional clarification for the business community, employee anxieties and questions will multiply.”

 

Wall Street Journal