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On Thursday, the House passed a massive tax-and-spending bill on a 218-214 vote, sending it to the Oval Office for President Donald Trump's signature. Two Republicans, Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania, voted with all Democrats against Trump’s “One Big Beautiful Bill," at the center of which is an extension of the 2017 Tax Cuts and Jobs Act. The legislation makes most of the tax cuts permanent, while increasing spending for border security, defense, and energy production, at the expense of programs such as Medicaid and the Supplemental Nutrition Assistance Program, or SNAP. “I want to thank Republican congressmen and women, because what they did is incredible,” Mr. Trump said. “You get tired of winning yet?” said House Speaker Mike Johnson (R-LA). “With one big beautiful bill we are going to make this country stronger, safer and more prosperous than ever before." The Tax Policy Center, which provides nonpartisan analysis of tax and budget policy, projected the bill would result next year in a $150 tax break for the lowest quintile of Americans, a $1,750 tax cut for the middle quintile and a $10,950 tax cut for the top quintile. That’s compared with what they would face if the 2017 tax cuts expired.

 

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The passage of U.S. President Donald Trump's tax-cut and spending bill has drawn sharp criticism from healthcare groups, who warn of severe consequences for millions of Americans. The bill proposes significant changes to Medicaid, which serves approximately 71m low-income individuals, including mandatory work requirements that could leave nearly 12m uninsured, according to the Congressional Budget Office. Bobby Mukkamala, president of the American Medical Association, stated, "It will make it more likely that acute, treatable illnesses will turn into life-threatening or costly chronic conditions." Critics argue that the bill's $4.5tn tax revenue reduction and $1.1tn spending cuts, primarily from Medicaid, will jeopardize healthcare access and increase consumer costs.

 

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The IRS has been advised to enhance security measures for tax returns to combat fraud and identity theft, as outlined in the Electronic Tax Administration Advisory Committee's (ETAAC) latest annual report. The report recommends updating the Modernized e-File reject codes and improving information sharing among the IRS, states, and industry partners. "Increasing digital transactions is one of the IRS' key goals," said IRS Commissioner Billy Long. The report also urges Congress to simplify tax legislation ahead of the expiration of provisions from the Tax Cuts and Jobs Act, emphasizing the need for timely updates to avoid disruptions during tax season. The ETAAC represents various stakeholders in the tax community, including taxpayers and tax professionals.

 

Accounting Today

California Gov. Gavin Newsom has signed a bill increasing the cap on the state's film and television tax credit program from $330m to $750m. The move aims to revitalize production in California, which has faced challenges due to the pandemic, strikes, and budget cuts. Mr. Newsom emphasized the need for bold action, commenting: “We’ve got to step up our game.” The bill, passed after significant lobbying, is seen as vital for the state's economy and cultural vibrancy. Rebecca Rhine, Directors Guild of America executive, praised the commitment to the production incentive despite various challenges. A separate bill, AB 1138, is also set for a vote, which would expand eligibility for the tax credit to include more types of productions and increase the credit to as much as 35% for certain projects. The adjustment aims to make California more competitive with other states offering similar incentives.

 

Los Angeles Times

The accounting and tax industry is grappling with a significant rise in burnout, with over 300,000 U.S. accountants and auditors leaving their jobs in recent years. According to AICPA, 51% of accounting leaders report experiencing burnout symptoms. Factors such as client expectations and heavy workloads contribute to this issue. While 86% of employers believe they support mental well-being, only 52% of employees agree. Investing in mental health benefits can yield a $4 return for every $1 spent, as 92% of workers desire expanded support. Ben Dutcher, a senior consultant at Kelly Benefits Strategies, emphasizes the importance of prevention, early intervention, and treatment in addressing mental health challenges in the workplace. Proactive measures can enhance productivity and foster a positive organizational culture.

 

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CPA Bassim Michael has developed Practice Gauge, a cloud-based analytics platform tailored for accountants serving dental and veterinary clients. He emphasized the importance of understanding client needs, adding: "I think what helps for dentists is that they usually work three or four days a week, so they actually have time to meet with their CPAs. So we created a client-focused type of practice, and we bundled accounting, tax advisory and tax planning, and they really liked it. We did value pricing and fixed pricing long before it was popular, back in 2006." The platform tracks financial data, overhead, and profitability, allowing for peer and trend analysis. Michael, who works with around 200 dentists across 16 states, noted the challenges posed by stagnant insurance reimbursements, which have not kept pace with rising salaries. "We've seen strong pressure on their earnings," he adds. Practice Gauge, certified by Intuit, integrates with QuickBooks Online and aims to enhance financial management for professionals in various fields.

 

Accounting Today

Plante Moran has announced new leadership roles effective July 1. Bill Brickey is now the managing partner of the Detroit office, focusing on staff development and practice growth. He succeeds Eric Wydra, who is retiring in November. Matthew Kelly leads the K-12 education practice, serving over 200 educational institutions, and continues to manage the Kalamazoo office, taking over from Jennifer Chambers. Finally, Alisha Watkins now heads the government practice, overseeing 200 professionals and ensuring compliance and operational best practices, succeeding Brian Camiller. Managing partner Jason Drake expressed optimism, stating: “I’m looking forward to seeing these talented professionals step into their new roles.”

 

ABL Advisor

In June, U.S. employers added 147,000 jobs, showcasing the labor market's resilience amid uncertainties surrounding President Donald Trump's economic policies. The Labor Department's monthly report also revealed that the unemployment rate decreased to 4.1%, down from 4.2% in May, with hiring surpassing economists' expectations. State government payrolls climbed by the most since the start of 2023, led by education, while employment at local governments also surged. Health care payrolls rose 59,000, the least in four months. Employment also moderated in leisure and hospitality, as a 20,000 increase in June followed a downward revision of similar size in May. Payrolls declined in manufacturing, wholesale trade and business services. Average hourly wages increased by 0.2% from May and 3.7% year-over-year, to $36.30. The Labor Department's weekly jobless report, meanwhile, revealed that initial claims for unemployment benefits fell 4,000 in the seven days to June 28th; the four-week moving average declined 3,750 to 241,500, while total claims, reported with a one-week lag, were unchanged at 1.964m. 

 

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The Commerce Department reported on Thursday that the U.S. trade deficit widened to $71.5bn in May, amid a steep drop in the value of exports. Economists had expected the trade deficit to increase to $71bn from the revised $60.3bn originally reported for April. May's imports slipped to $350.5bn, from $350.8bn, while exports declined to $279bn, from $290.6bn. The report also said the goods deficit widened to $97.5bn in May from $86.3bn in April, while the services surplus edged down to $26bn in May from $26.1bn.

 

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Del Monte Foods has filed for Chapter 11 bankruptcy protection after struggling with rising borrowing costs, pandemic missteps and a changing global economy. The 138-year-old company, known for its canned fruits and vegetables, is going through a sale process for all of its assets. It has secured $912.5m in new funding to remain afloat during the sale process, and will operate as normal as it enters the peak canning season. During the coronavirus pandemic, when more people were eating at home, demand rose to record highs, Del Monte said in the filing, and the company committed to higher production levels. However, demand softened in the years since, leaving it with bloated stocks that had to be sold at a "substantial" loss. Del Monte is also carrying a large amount of debt, which was added to its books following its acquisition in 2014 by Del Monte Pacific Limited.

 

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The National Retail Federation has filed a lawsuit against New York state over a new law aimed at preventing retailers from using personal customer data for pricing, termed surveillance pricing. Gov. Kathy Hochul signed the first-in-the-nation law in May, saying the practice of charging different prices based on customers' willingness to pay was "opaque," and prevented those customers from comparison-shopping. The trade group argues that the law infringes on its members' constitutional rights and hampers their ability to use pricing algorithms for promotions, customer loyalty rewards, and potentially lower prices.

 

Reuters

Europe's largest asset manager, Amundi, has expressed concern about the boom in dollar-backed stablecoins in the wake of the Senate's passage of the GENIUS Act. The legislation aims to establish a regulatory framework for U.S. dollar-pegged cryptotokens, which could precipitate significant shifts in global money flows. Vincent Mortier, Amundi's chief investment officer, said: "It could be genius, or it could be evil . . . It could potentially destabilize the global payment system." JPMorgan expects the amount of stablecoins in circulation to roughly double to $500bn in the next few years.

 

Reuters

The OECD-led global tax deal faced significant changes this week as the U.S. and its G7 allies reached an agreement to exempt American companies from two critical components of the global minimum tax framework. This decision was made in exchange for Congress removing Section 899 from its tax-and-spending bill, which was known as the “revenge tax” aimed at increasing taxes on foreign-owned companies facing unfair taxation from their home countries.

 

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