National Preservation Partners Network’s Post

For more than two decades, Democrats have watched with frustration as tax policy in the United States has settled into a pattern, one that Senator Elizabeth Warren, a Massachusetts Democrat, calls the “tax doom loop.” It goes like this: Republicans pass huge tax cuts that are, at first, only temporary. By the time the tax cuts are set to end, Americans have become used to owing less to the government. Hesitant to raise taxes, Democrats join with Republicans to continue many of the cuts indefinitely. To liberals, this cycle is to blame for a range of social and economic ills. Widening inequality. Ballooning deficits. A federal government without the resources to pay for a progressive agenda. And next year, they hope, is their chance to finally stop it. That’s because much of the last large Republican tax cut, a 2017 law signed by President Donald J. Trump, will expire after 2025. Progressive tax experts and activists have spent years organizing to convince the Democratic Party that rather than simply extending the cuts, it needs to ensure the United States brings in more tax revenue so it can finance more generous social programs. “People want to avenge it,” said Lindsay Owens, the executive director of the Groundwork Collaborative, a progressive advocacy group that is meeting with congressional staff and preparing advertising campaigns on the tax debate. It’s an uphill fight. Cutting taxes remains a popular political promise. Mr. Trump and Republicans are pushing to extend the law and further reduce taxes if they come into power. While Vice President Kamala Harris has pledged to raise taxes on high-income Americans and corporations, her presidential campaign has also said she would not raise taxes on any household making less than $400,000. That means she, too, wants to continue much of Mr. Trump’s tax cut. So in many ways the “tax doom loop” should roll on next year, with roughly 98 percent of the population politically off limits for a tax increase. “They’ve already lost that battle,” said Rohit Kumar, a former aide to Senator Mitch McConnell, Republican of Kentucky, and co-leader of PwC’s national tax office. “For progressives to win the battle that they think they’ve been losing, they would have to convince the president and the Congress to contemplate a fairly significant middle-class tax hike. And that’s partly why they haven’t been successful.” But Democratic tax experts still see a narrow path to redemption. They have put together what they believe are politically palatable plans for increasing taxes on very high earners and large corporations. The goal is to raise more than enough revenue to cover the costs of extending other tax cuts. “It’s now the case that billionaires can lead a lavish lifestyle and pay little or nothing in federal income taxes,” Ms. Warren said. “That has to be fixed first.”

Can Democrats Stop the ‘Tax Doom Loop’? Democrats are tired of losing to Republicans on tax policy. They’re hoping to mount a comeback next year. For more than two decades, Democrats have watched with frustration as tax policy in the United States has settled into a pattern, one that Senator Elizabeth Warren, a Massachusetts Democrat, calls the “tax doom loop.” It goes like this: Republicans pass huge tax cuts that are, at first, only temporary. By the time the tax cuts are set to end, Americans have become used to owing less to the government. Hesitant to raise taxes, Democrats join with Republicans to continue many of the cuts indefinitely. To liberals, this cycle is to blame for a range of social and economic ills. Widening inequality. Ballooning deficits. A federal government without the resources to pay for a progressive agenda. And next year, they hope, is their chance to finally stop it. That’s because much of the last large Republican tax cut, a 2017 law signed by President Donald J. Trump, will expire after 2025. Progressive tax experts and activists have spent years organizing to convince the Democratic Party that rather than simply extending the cuts, it needs to ensure the United States brings in more tax revenue so it can finance more generous social programs. People want to avenge it,” said Lindsay Owens, the executive director of the Groundwork Collaborative, a progressive advocacy group that is meeting with congressional staff and preparing advertising campaigns on the tax debate. It’s an uphill fight. Cutting taxes remains a popular political promise. Mr. Trump and Republicans are pushing to extend the law and further reduce taxes if they come into power. While Vice President Kamala Harris has pledged to raise taxes on high-income Americans and corporations, her presidential campaign has also said she would not raise taxes on any household making less than $400,000. That means she, too, wants to continue much of Mr. Trump’s tax cut. https://lnkd.in/gYQP78hu

A bipartisan compromise to expand the child tax credit and restore some corporate tax breaks looks like it may wither under opposition from Senate Republican leadership, dooming the measure even though the House passed it with a huge majority this year. The Senate’s top Republican tax writer, Mike Crapo (Idaho), opposes the bill, as do other top party officials. Most Democrats back it, and supporters say it’s close to having enough GOP votes to overcome a filibuster but could still be short. With tax season over and elections approaching rapidly, the Senate may not take the bill up at all if lawmakers don’t act soon. But even some Republicans who like the compromise plan say they might rather deal with the issue next year. The GOP hopes to control the Senate — at least — after November’s elections, and sweeping tax policy changes will already be on Congress’s agenda no matter who controls the chambers because much of the Trump-era Tax Cuts and Jobs Act expires in 2025. Lawmakers will have to decide whether to extend any of the trillions of dollars in tax cuts that are set to come off the books, and the child tax credit could roll into that broader debate. “I think from a political standpoint, a lot of Republicans, me included, feel like we’ll have more leverage a year from now than we have today,” Sen. Kevin Cramer (R-N.D.) said Tuesday. “… We want to help working families. We want to help the employers who support those working families, who hire those working families, and we have a year to do it. And we don’t need to rush into it.” Other supporters, especially Senate Finance Chair Ron Wyden (D-Ore.) and some rank-and-file Republicans, are pressing Senate Majority Leader Charles E. Schumer (D-N.Y.) to bring the $79 billion legislation to the floor and dare their fence-sitting conservative colleagues to vote against it. “I think we need to call their bluff on it,” Sen. Markwayne Mullin (R-Okla.) said. “There’s a lot of people that may not commit to it until it goes on the floor. I told Wyden to tell Schumer bring it to the floor. Make people vote against the tax bill. I mean, when it comes time to actually make the vote, and you’re going to vote against the tax bill? As Republicans? Let’s try that. Let’s see if you’re really going to do that.” The bill pairs an expansion to the child tax credit, or CTC with restoring some business tax incentives initially limited in 2017 under President Donald Trump. Negotiators had set a loose April 15 deadline to consider the bill so it could help filers with this year’s tax returns; the Senate’s May work period is widely seen as the bill’s last shot. Research from economic analysis firm Implan found that expanding the tax credit would boost the U.S. gross domestic product by $11.4 billion and would increase household spending — especially on food and health-care services — by $7.3 billion in its first year.

Are big changes in tax laws coming soon? Not likely, but you might want to take advantage of higher estate and gift tax exemptions well before the end of 2025.

**Montana Democrats Introduce Bill: Combating Rising Property Taxes** Montana Democratic lawmakers recently introduced a comprehensive bill aimed at providing relief to homeowners facing rising property taxes. Key elements and potential impacts of this legislation offer valuable insights for property owners and businesses: **Key Elements of the Proposed Legislation:** 1. **Assessment Cap Limits**: Caps annual property value assessment increases to reduce steep tax hikes. 2. **Homestead Exemptions**: Expands exemptions, significantly lowering the taxable value of primary residences. 3. **Revenue Neutral Rate Adjustments**: Ensures property assessments changes don't disproportionately increase tax burdens. 4. **Transparent Assessment Processes**: Mandates clearer communication and public accountability from assessment offices. 5. **Taxpayer Protections**: Safeguards against predatory practices with appeal processes and rights to contest unfair assessments. **Potential Impacts for Montana Homeowners:** 1. **Stabilized Tax Bills**: Caps and adjustments help create more predictable, stable property tax bills. 2. **Increased Home Affordability**: Expanded exemptions improve overall affordability in a volatile housing market. 3. **Enhanced Transparency**: Clarity and public trust in property tax systems empower informed homeowner decisions. 4. **Fairer Tax System**: Protections ensure equitable treatment, reducing exploitation potential. 5. **Long-Term Economic Stability**: Balanced property tax regime benefits homeowners and the broader economy. As this bill undergoes scrutiny and revisions, homeowners and taxpayers should stay informed and engaged with their local representatives. Beyond the legislative changes, there are proactive steps to manage property taxes effectively: - Review your property assessment annually and appeal discrepancies. - Utilize available exemptions like homestead and veterans' exemptions. - Stay current with local tax laws and participate in community forums. - Consult tax professionals for personalized advice tailored to your situation. **Next Steps**: Ensure you are well-prepared for changes in property taxes. **[Reach out to Together CFO or set up a call](https://lnkd.in/gAa4dwUG for expert guidance tailored to your financial needs. Proactive tax planning can make a significant difference in your overall financial health!

"TCJA is still set to expire at the end of next year. "And the Tax Foundation is still forecasting that if that occurs, 62 percent of households would see a tax increase and that's nine times more than would see a tax cut. "Republicans are still claiming that Democrats want to see everybody's taxes go up and will let TCJA expire. And Democrats are still counterclaiming that nearly all the benefits of an extension will go to the rich and to large companies. I know you'll be shocked that neither claim is true. "The next decision point for Americans on this is the election. We won't know how either a lame-duck package or TCJA extension will proceed until election results are in. "The first thing to be considered is election politics will determine when an omnibus spending bill is done. There's already some support for pushing the omnibus into next year, which would likely end any chances for a tax extender's package. A December omnibus, on the other hand, might be able to accommodate tax extenders. "As for TCJA, both parties are preparing for a clean sweep on Election Day followed by a reconciliation bill that would deal with taxes in their own particular partisan idiom. It seems more likely Republicans will sweep than Democrats because of how favorable the Senate map is to Republicans. "But it also appears that divided government is a definite possibility and no one seems to be preparing for a bipartisan TCJA extension." ☝️ Sword Doug assesses the tax policy items on Congress’s slate this fall, from IRS funding to TCJA extenders, and the potential implications of the upcoming elections.

📊 Iowa's Tax Competitiveness: Progress and Opportunities Iowa now ranks 20th on the 2025 State Tax Competitiveness Index, showing substantial improvement thanks to recent reforms. These changes have modernized the tax landscape and positioned the state more competitively in the region. 🌟 The Progress: Lower income tax rates and the phaseout of the state’s inheritance tax (fully eliminated in 2025). The repeal of outdated policies like federal deductibility and the alternative minimum tax. A move toward a single-rate individual income tax structure in 2025, enhancing simplicity. 🔎 The Challenges: A high property tax burden compared to many neighboring states, with rates applied unevenly across homeowners, renters, and businesses. Taxation on tangible personal property (such as machinery and equipment) without exemptions for small businesses. A graduated corporate income tax structure, though reductions are planned over time. While the tax reforms signal significant strides, challenges like property tax burdens and local income taxes highlight the need for continued attention. Balancing growth-focused policies with equitable tax structures will be key to Iowa’s future success. What are your thoughts on these trends? Is Iowa striking the right balance?