Income Tax News

Canadian Prime Minister Mark Carney emphasised that the tax cut will help hard-working Canadians keep more of their paychecks, with savings of up to USD 840 per year for families.

Toronto:

A day after forming the new cabinet, Canada on Thursday announced a significant personal income tax cut as one of the government’s top legislative priorities for the new parliamentary session. The proposal will see the lowest marginal personal income tax rate reduced from 15 per cent to 14 per cent, effective from July 1, 2025.

The measure from the Canadian government is expected to benefit nearly 22 million Canadians. According to government estimates, two-income households could save up to USD 840 annually by 2026.

Canada’s Department of Finance in a statement said, “Minister of Finance and National Revenue, Francois-Philippe Champagne, today announced one of the first orders of business on the government’s legislative agenda for the new session of Parliament: tax relief for nearly 22 million Canadians, saving two-income families up to USD 840 a year in 2026.”

“Once legislated, the lowest marginal personal income tax rate will be reduced from 15 per cent to 14 per cent, effective July 1, 2025. This tax cut will help hard-working Canadians keep more of their paycheques to spend where it matters most. This measure is expected to deliver over USD 27 billion in tax savings to Canadians over five years, starting in 2025-26,” the release added.

Canadian Prime Minister Mark Carney emphasised that the tax cut will help hard-working Canadians keep more of their paychecks, with savings of up to USD 840 per year for families.

Sharing a post on X, Carney wrote, “Canada’s new cabinet met for the first time this morning. One of our first orders of business: a tax cut for the middle class. Starting July 1, hard-working Canadians will keep more of their paycheques.”

He added, “Last month, Canadians called for change to bring down the cost of living and to put money back in their pockets. My government will be delivering that change–cutting taxes for the middle class and saving families up to USD 840 a year.”

Champagne emphasised the economic benefits of the new middle-class tax cut and said that this move would provide support amid ongoing economic challenges, including trade uncertainties.

“With today’s middle class tax cut, we are setting the stage for economic growth by helping hard-working Canadians keep more of their paycheques to spend on the priorities that matter most to them. Every Canadian should be able to afford necessities, feel secure, and get ahead financially–and this tax cut will help them do just that. As Canadians continue to feel the impact of ongoing challenges, including trade and tariff uncertainties, they should be able to keep more of what they earn to help build a stronger future and a more resilient Canada,” Champagne said.

As per Canada’s Department of Finance, income is reported and tax is calculated annually. To reflect a one-percentage-point cut in the lowest tax rate coming into effect halfway through the year, the full-year tax rate for 2025 will be 14.5 per cent, and the full-year rate for 2026 and future tax years will be 14 per cent.

The Canada Revenue Agency will update its source deduction tables for the July to December 2025 period so that pay administrators can reduce tax withholdings as of July 1. This means that, effective July 1, individuals with employment income and other income subject to source deductions could have tax withheld at 14 per cent. Otherwise, individuals will realise this tax relief when they file their 2025 tax returns in spring 2026.

The bulk of tax relief will go to those with incomes in the two lowest tax brackets (i.e., those with taxable income under USD 114,750 in 2025), including nearly half to those in the first bracket (USD 57,375 and below in 2025).

(With inputs from ANI)

Originally Appeared Here

As of April 15, 2025, the window for filing Employee Retention Credit (ERC) claims officially closed, marking the end of a significant chapter in pandemic-era relief. Yet, while the filing period has ended, the program is far from over. What Congress intended as a lifeline for businesses during the pandemic has become a drawn-out and often confusing experience for many taxpayers.

With more than 597,000 unprocessed claims still in inventory and thousands of disallowance notices already issued, the IRS must now turn its full attention to administering this program in a manner that prioritizes fairness, transparency, and taxpayer rights.

A Brief History of a Bumpy Road: Promise, Complexity, and Consequences

Congress designed the ERC to encourage businesses and nonprofits to retain employees during the economic upheaval of COVID-19. While the credit offered critical financial relief to these employers, it was also highly complex, making it challenging for even the most diligent taxpayers and practitioners to navigate. Unfortunately, this complexity combined with aggressive marketing left the IRS with the unenviable task of discerning which taxpayers filed legitimate ERC claims and were truly depending on it to provide economic relief, and those that were taking advantage of the “perfect storm” for their own personal gain (i.e. complexity of the law, the large payouts, and aggressive marketing by bad actors.)

To address this, the IRS implemented a moratorium on processing new ERC claims beginning September 14, 2023. Hitting the pause button on processing ERC claims may have been a reasonable strategy for the IRS at first, but the moratorium kept going and going and going …. leaving legitimate taxpayers in limbo—many for months or even years. Now that the IRS has resumed processing claims (allowing, disallowing, or initiating an audit on the claim), the focus must shift toward fairness, efficiency, and transparent communication.

Where We Stand Now

The IRS’s return to processing all ERC claims is welcome news, but there’s a long way to go. I think it’s important to frame this progress with realistic expectations.

Despite processing thousands of claims over the last few months, as of early April, over 597,000 ERC claims remain in the IRS’s inventory, including nearly 11,000 cases submitted through my office, TAS, that remain unresolved.

These are often taxpayers who are facing financial hardship and who have limited resources to navigate IRS delays. While the IRS has processed about 64 percent of TAS-submitted claims, that still leaves thousands of small businesses and nonprofits waiting for answers—and often, for desperately needed funds.

Although the IRS has made significant progress on the backlog of ERC claims, there is still a long way to go, and it’s unlikely it will resolve all claims quickly. Realistically, it could take at least until the end of calendar year 2025 to complete processing. That’s a long time for taxpayers to remain in limbo. Therefore, the IRS needs to commit as many resources as possible to ensure it continues to process these claims quickly.

It’s time to eliminate the ERC backlog and provide the relief Congress intended.

A Growing Problem: Disallowed Claims and Lack of Clarity

Unfortunately, for many businesses, the challenges don’t stop once the IRS processes a claim. To date, the IRS has issued letters for approximately 84,000 returns claiming the ERC, partially or fully disallowing the claims, and in many of these cases it has not clearly informed taxpayers why their claim was disallowed.

When taxpayers contest a disallowance, the process is opaque, and many have reported that movement is slow and challenging, especially the IRS’s review of taxpayer responses to disallowance notices. Adding additional challenges, there’s no way to track the status of their case once the taxpayer submits a protest requesting consideration by the Independent Office of Appeals, and timelines can stretch on indefinitely. Until the IRS reviews the response, the case is not forwarded to Appeals. Worse, if the process takes more than two years from the date of the disallowance notice, the IRS is legally barred from issuing a refund – even if it later agrees the taxpayer is right and entitled to the refund.

This is not just a matter of red tape; it’s a matter of taxpayer rights, such as the rights:

• To be informed;
• To challenge the IRS’s position and be heard; and
• To a fair and just tax system.

Progress – and Room for Improvement

To its credit, the IRS has recently begun issuing guidance for the Letter 105-C and the Letter 106-C on how to respond to ERC claim disallowances and amend returns following an ERC determination. But these efforts came too late after confusion has already ensued.

For the next chapter of the ERC saga, proactive, timely, and transparent communication must be the norm, not the exception. Sitting in limbo is not acceptable.

The Path Forward: Advocate for Taxpayer-Centered Reform

The ERC may be closed to new claims, but its story is far from over. The IRS has a tremendous amount of work ahead, and a responsibility to taxpayers who engaged with the program in good faith.

To support those taxpayers, I urge the IRS to adopt the following recommendations:

1. Finish the job: Commit to processing all ERC claims by the end of calendar year 2025.
2. Prioritize hardship cases: Process claims from taxpayers experiencing financial hardship first, followed by the remainder in the order received.
3. Be transparent: Ensure disallowance notices and Letter 86C include clear factual and legal explanations and give taxpayers sufficient time to respond before transferring cases to Appeals for consideration.
4. Protect taxpayer rights: Track the IRC § 6532 two-year statute of limitations on contested claims and notify taxpayers six months prior to expiration. Also provide clear instructions for executing Form 907 to extend the limitations period, if appropriate.
5. Offer faster resolution: Allow ERC claimants access to Fast Track Appeals, providing a quicker and less burdensome alternative to litigation.

Final Thoughts

The ERC was born out of crisis and offered real hope to businesses trying to survive. But years later, the program remains a source of confusion and frustration for too many taxpayers. As the IRS moves forward, it must commit to clear communication, timely processing, and a deep respect for the rights of those it serves.

Taxpayers deserve closure – and they deserve to be heard.

Resources

Originally Appeared Here

President Donald Trump this week told House Republicans to raise taxes on the richest Americans as part of their sprawling budget bill, according to The New York Times and The Washington Post, which cited people familiar with Trump’s stance.

Why It Matters

Trump’s reported demand stands in stark contrast to the mainstream Republican position on taxes, which generally favors tax cuts for wealthier Americans—and also marks a reversal on the president’s own position from just weeks ago.

It could also upend the already tenuous negotiations surrounding the GOP’s budget proposal that House Speaker Mike Johnson is working to shepherd through the lower chamber.

In addition to extending the Tax Cuts and Jobs Act that Trump signed into law in 2017, Republicans are also trying to incorporate Trump’s campaign promises in the measure, including eliminating taxes on tips and increased funding for border security.

The proposal, as it stands at the moment, faces unanimous opposition from congressional Democrats.

House Speaker Mike Johnson, left, and President Donald Trump are seen outside the U.S. Capitol after the Friends of Ireland Luncheon on March 12.
House Speaker Mike Johnson, left, and President Donald Trump are seen outside the U.S. Capitol after the Friends of Ireland Luncheon on March 12.
Francis Chung/POLITICO via AP Images

What To Know

The Times reported that Trump wants people who make more than $2.5 million per year to face a 39.6 percent income tax. The highest current income tax rate of 37 percent applies to those who make more than $626,350 per year and married couples who make more than a combined $751,600 per year.

If implemented, Trump’s plan would roll back one of the tax cuts that took effect as a result of the Tax Cuts and Jobs Act.

Trump instructed Johnson to include the tax hike in the “big, beautiful bill” during a phone call on Wednesday, the Times reported. The president’s move comes weeks after he publicly spoke out against raising taxes on millionaires.

“I think it would be very disruptive because a lot of the millionaires would leave the country,” he told reporters in the Oval Office last month. “In the old days, they left states, they’d go from one state to the other. Now with transportation so quick and so easy, they leave countries.”

What People Are Saying

Podcast host and former White House chief strategist Steve Bannon recently posted on social media site Gettr: “Big story in WaPo that talks about how the great Russ Vought, Scott Bessent, and others including JD Vance are not just open to working on the ability to have an increase in taxes for, if not the upper bracket, then those making a million or more at 40%.

Bannon added: “Something we’ve advocated strongly and worked for many years here because it is the right thing to do. The working class and middle class need additional tax relief, and this is the way to get it.”

Johnson previously weighed in on raising taxes on millionaires, telling Fox News last month: “I’m not a big fan of doing that. We’re the Republican Party, and we’re for tax reduction for everyone—that’s a general principle that we always try to abide by. There’s lots of discussion, lots of ideas on the Hill. People have different thoughts and theories on how we can solve this perfect equation to get all of this done. But I wouldn’t put any money on any of that yet.”

GOP Senator Josh Hawley of Missouri said he wasn’t opposed to hiking taxes on the wealthiest but told the Post that Republicans wouldn’t back the plan: “Zero, probably,” he said when asked how many would support it. “Maybe one or two.”

What Happens Next

House Republicans are continuing their negotiations over the sweeping budget proposal.

According to the nonpartisan group Committee for a Responsible Federal Budget, Trump’s agenda items and the GOP’s priorities in the bill are estimated to cost more than $11 trillion over the next ten years, which Republicans are working to offset by cutting spending in other areas.

Democrats have warned that some of those cuts could affect Medicaid, though Trump has publicly pledged not to touch the critical program, which serves more than 70 million Americans.

Update 5/8/25 9:29 p.m. ET: This story has been updated with additional information and context.

Originally Appeared Here

Montana Gov. Greg Gianforte ©Image courtesy of Montana governor

The 2025 Legislative Session is officially over in Montana. Lawmakers in the Treasure State focused on several priorities during their time in Helena, including record income tax relief, reducing business costs with unemployment insurance reform, and clarifying environmental laws in response to court rulings. There were a couple of missed opportunities as well, and although property tax relief bills were approved, more work needs to be done to avoid further cost shifting and to bring greater transparency to why property taxes are increasing.

Although not as large as originally proposed by Gov. Greg Gianforte, record income tax relief was adopted with the approval of House Bill 337. The various income tax changes are expected to save taxpayers more than $750 million over the next four years. Even with this record tax cut, there is more work to be done in Montana.

As noted by the governor: “The reality is, even after our historic tax cuts in 2021 and 2023, we still have the highest income tax rate in the region and one of the highest in the nation.”

Continuing the tax cut theme, lawmakers also adopted House Bill 210 to reduce the state’s unemployment insurance burden for businesses. These changes are expected to save employers approximately $250 million over the next decade.

Secretary of State Christi Jacobsen said: “We’ve had record business growth in the state of Montana under Republican leadership in the last four years. In 2024, we had over 64,000 new businesses in the state. This is just a continued move to have historic tax cuts for Montana businesses and getting government out of the way so Montana businesses can thrive.”

Property tax reform was a big focus of the 2025 legislative session, but structural changes may need to wait for the next time lawmakers meet in 2027. Senate Bill 542 essentially freezes property tax values for the next two years, while House Bill 231 did reduce property taxes, but did it by shifting the burden to other taxpayers. Not acted on was the proposal for Truth in Taxation to bring greater transparency to what drives the property tax burden – spending.

As noted by Senate Taxation Committee Chair Greg Hertz: “Unfortunately, all we did was just rearrange who is paying property taxes in Montana.”

Along with reforming taxes, lawmakers spent time addressing the state Supreme Court’s controversial environmental rulings. Discussing these bills, Gianforte said: “Last year, the Montana Supreme Court issued a series of rulings that if left unchecked would have impacted Montana’s energy sector at time when Americans have seen electricity costs soar nearly 30 percent in the last four years. This package of legislation reduces red tape and provides certainty to small and large businesses across our state.”

According to the Governor’s press release, the five reform bills are:

House Bill 285 – Reaffirms that the purpose of environmental reviews is procedural in nature and is to share information with policymakers and the public.House Bill 270 – Clarifies that courts may not vacate permits without properly considering a number of factors in law, including impacts to Montana’s economy and the public interest.

House Bill 291 – Makes it clear that the State of Montana cannot adopt air quality standards that are stricter than the federal government’s, except in specific circumstances.House Bill 466 – Outlines that projects that are exempt from National Environmental Policy Act are also exempt from MEPA, reducing burdensome red tape and potentially duplicative processes.Senate Bill 221 – Clearly states what impacts are required to be included in MEPA assessments and directs DEQ to develop guidance for use by state agencies.

While Montana’s 2025 Legislative Session saw mostly positive outcomes for supporters of the free market and limited government policies, there were a couple of curious decisions. One was the approval of House Bill 477 to ban Styrofoam products. Another was the failure to advance Senate Bill 94 to end taxpayer subsidies of government union activities.

When all was said and done during the 85 days of session, Montana lawmakers debated a record 1,759 bills, sending 803 of those to the governor’s desk. Realizing these are part-time lawmakers who have sacrificed time away from their families and regular jobs, Mountain States Policy Center sends our thanks for their service and commitment to the people of the Treasure State.

Jason Mercier is Vice President and Director of Research of Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming. Online at mountainstatespolicy.org.

Originally Appeared Here

By Rachel Cohrs Zhang
Bloomberg News
(TNS)

President Donald Trump has set his sights on the pharmaceutical industry to shoulder part of the cost of his tax cuts, pressing congressional Republicans to force drugmakers to accept lower prices on prescriptions covered by Medicaid.

Trump asked House Republicans to mandate the government health program for low-income and disabled Americans get the lowest price for drugs that certain foreign countries are charged, the White House confirmed in an email to Bloomberg. The president made the request during ongoing talks over how to cut hundreds of billions of dollars in government spending to fund tax cuts.

The strategy could potentially ease one of the most contentious issues dividing Republicans as they seek to offset some of the cost of the tax cuts: whether to force millions of low-income Americans off Medicaid health coverage.

But it risks antagonizing a powerful Washington lobby. The pharmaceutical industry has fiercely fought efforts to lower the prices federal programs pay for drugs.

It’s also unclear how much savings the approach would generate. Medicaid already gets a set discount off the lowest price a drug maker offers in the domestic private market.

“There’s every reason to believe Medicaid is getting an incredible price for most drugs,” said former Biden administration Centers for Medicare and Medicaid Services official Kristi Martin.

The request is the first public indication that Trump is returning to a theme from his first term—that the U.S. overpays for drugs compared with other countries. However, his earlier plans were focused on the Medicare program, which includes older adults and is the nation’s largest payer for medicines.

“This is utterly unsurprising on one hand, but the details are a little surprising,” said Benedic Ippolito, a senior fellow in economic policy studies at the conservative think tank the American Enterprise Institute.

The pharmaceutical industry, battered by legislative losses under former President Joe Biden’s term, has aggressively lobbied for favorable policies this term. Executives have traveled to Trump’s Mar-a-Lago resort club, trumpeted investments in domestic manufacturing and argued their case in White House meetings. Trump even gave Eli Lilly & Co. CEO Dave Ricks a call-out at a public White House event Wednesday, saying Ricks “sweet talks” him about pushing reform to pharmacy middlemen.

While the pharmaceutical industry has notched some wins with temporary relief on tariffs and an industry-friendly provision in a recent executive order, Trump’s revival of his policy idea executives most dislike is bad news.

“Government price setting in any form is bad for American patients… At a time when we are facing growing competition from China, policymakers should focus on fixing the flaws in the U.S. system, not importing failed policies from abroad,” PhRMA spokesperson Alex Schriver said in a written statement.

The proposal to apply an international drug pricing element to Medicaid is a new one, and is a curveball in talks that have largely centered on complex details of how state Medicaid programs are funded and who should be eligible for health coverage. Those proposals would financially hurt state governments, health insurers and hospitals and drive millions of Americans off the insurance program.

Obstacles remain. Drafting legislation from scratch and getting it cleared by budget analysts in time to assemble a package this summer is a formidable task. Conservative Republicans in both chambers of Congress have in the past opposed the policy on the grounds that it constitutes “socialist price controls,” as Senator Mitch McConnell said when Democrats floated the idea.

Without details, it’s impossible to tell whether the savings could be enough to fund the hundreds of billions of dollars lawmakers are seeking. Medicare makes up a roughly three times larger share of retail drug spending than Medicaid, according to a 2017 analysis by the nonpartisan health policy research firm KFF.

“It would be very difficult to get big budget savings from Medicaid drug spending on the scale of what we’re talking about,” Ippolito said.

Politico first reported Trump’s request on international reference pricing.

Photo caption: President Donald Trump walks on the South Lawn of the White House on May 1, 2025. (Yuri Gripas/UPI/Alamy Live News)

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©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency LLC.

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Originally Appeared Here

IRS to reduce workforce

Last season, taxpayers spent 13 hours doing their taxes, according to a report on ABC. How much we get taxed, how we submit our tax returns, and everything that happens after that could potentially be impacted soon, as early as late May of this year.

As with many federal programs and agencies, change is coming to the IRS as well. The Trump administration plans to reduce its workforce by 18 percent as a cost-cutting measure proposed by the Department of Government Efficiency (DOGE.) This would lead to the slashing of the jobs of some 7,000 of its probationary employees.

This year, the IRS is expected to collect about 97 percent of the revenues that fund the federal government, estimated to be around $5 trillion. Due to this upcoming restructuring, though, it is projected to lose out on about $700 billion in owed taxes, said Professor Natasha Sarin, speaking at an American Community Media briefing on April 11. She is a professor of Law and Finance at Yale and president of the Budget Lab, also at Yale.

Top 1% will pay less tax

The reason they won’t be collected is not because the vast numbers of those who earn a wage or a salary will not be paying their taxes. They will because their taxes are taken out of their paychecks, she explained. It is those who make money through means other than employment that are a lot less visible to the IRS, and it is they who have a lot of scope to pay less tax than what they owe.

“The vast plurality of underpayment is coming from those at the very top of the income ladder— the top one percent of the earners,” Sarin said. 

Fewer staff means fewer audits

According to Sarin, reports suggest that the IRS could be trimmed by as much as 50 percent. That would be like having an IRS at levels not seen since 1960, when the U.S. population was around 60 million and the economy was much less complicated.

At the Budget Lab, Sarin and her team tried to gauge the consequences of such a measure. “What we found is that a shrunk IRS could lead to a loss of revenue of $400 billion over the next decade. But that number could go up to as high as $2.4 trillion if we take into account the indirect effect of the staffing reduction,” she said.

The IRS of the future will do fewer audits of the rich because it will have fewer resources to do so. And that will shape the behavior of taxpayers in a big way. Just as people are less likely to drive recklessly in the presence of speed cameras, so businesses are less likely to underpay their taxes or evade them if they see other businesses getting audited. “Take away the enforcement and you lose not just direct tax dollars, but also these indirect tax dollars,” she explained.

Impact of changes

Speaking about how these changes would be felt at the level of individual taxpayers, Michael Kaercher, Deputy Director of the Tax Law Center at NYU School of Law and former IRS attorney, said, “I see a couple of things playing out. An IRS that is going to see cuts at the level that is being talked about is going to have a hard time answering phone calls. There has been some strong messaging that the IRS may pull the software with which many Americans could do their taxes at no cost.”

Aravind Boddupalli, a researcher at the Urban-Brookings Tax Policy Center, focused on the recent agreement between the IRS and ICE to share data. This, he believes, will lead to three outcomes.

A) This arrangement will effectively reduce how much federal tax the agency collects because illegal immigrants, who do pay taxes, will stop doing so, for fear of being deported. They chip in over $60 billion to the U.S. economy.

B) It will erode public trust in the agency. Up until now, the IRS has kept taxpayer data highly confidential, bound as it is by §6103 of the federal tax code. “It has no stated exception for immigration enforcement.” As a result, folks who are not documented have paid their taxes in good faith, hoping that paying their taxes will, one day, enable them to acquire a legal status,” Boddupalli said. 

C) It will have a chilling effect in other areas, too. Immigrants will be reluctant to engage not only with the IRS, but with other government agencies as well, and other spaces where they sense risk, such as going to see a doctor or sending kids to school.

Loss of Revenue

The purported goal of reducing the IRS is to reduce government spending and its operating costs. But paradoxically, this may lead to a loss of revenue, which could potentially exceed what could be gained through the reduction in the workforce, these experts warned. To offset some of that loss, there is a plan being contemplated to cut Medicaid and SNAP, which would harm low-income households.

Tariffs are being considered as a stream of revenue. But they are essentially “consumption taxes,” said Kaercher, which, again, would have a “far greater impact on the low-income households than the very rich.”

AI could replace some IRS agents, but who would train those AIs? Surely, that job would need humans.

Related

Originally Appeared Here

Ever wonder why your friend in Florida brags about tax season? It might be because their state doesn’t collect any income tax. Let’s break down which states take the biggest (and smallest) bites out of your paycheck. State income taxes are separate from federal income taxes and help fund services including education (including K–12 teacher salaries), healthcare, infrastructure, public assistance, and state prisons. Some states have a flat income tax rate, while others have a progressive rate, which means that higher earners pay a larger percentage of their income.

In 2022, the highest average state income taxes per person were in New York ($4,461), California ($3,735), and Massachusetts ($3,475). The lowest averages among states that tax wages were in North Dakota ($605), Mississippi ($863), and Louisiana ($975). But you could say the lowest averages were truly in the nine states that didn’t collect any state income tax. As of 2025, they were Alaska, Florida, Nevada, South Dakota, New Hampshire, Tennessee, Texas, Washington, and Wyoming.  (New Hampshire and Tennessee collected small amounts in 2022 as they phase out income tax laws).

Help Wanted: Air traffic controllers. These professionals help manage air traffic and keep the skies safe. The Federal Aviation Administration (FAA) controls 290 air control facilities, but as of September 2023, nearly half of those facilities were understaffed. What’s behind the nationwide gaps?

In 2023, the FAA set a staffing goal of reaching 85% of target staffing levels at terminal air control facilities. Of the 290 facilities, 128 fell short. Of the facilities that fell short of the goal, 84 had staffing ranges between 75.0% and 84.9%. The remaining 44 were staffed to less than 75%. Staffing levels included trainees. The FAA cites several causes for shortages, including training delays related to COVID-19, an already-lengthy training timeline, and limited on-the-job training opportunities. Workforce losses from retirements, promotions, and resignations also play a role. In 2023, Minnesota’s Rochester Tower was the nation’s most understaffed facility (at 47.8% of target air traffic controllers on staff). Iowa’s Waterloo Tower (56.5%) and New Jersey’s Morristown Tower (57.9%) followed. The FAA exceeded its hiring goals in 2023 and in 2024. As of 2025, the FAA has announced a plan to accelerate air traffic controller hiring to address the shortages.

Tariffs are back in the news, but did they really ever leave? Here are the facts on tariffs in light of the tariffs President Trump announced on dozens of nations last Wednesday. USAFacts also took tariffs questions from our online followers last week. Replay the live stream here. Tornadoes tore through the central US last week, killing several people. Here’s the data on where tornados happen most often. The US dollar hit a six-month low against other major currencies on Thursday. Traditionally the dollar is strong. A federal judge ruled last Monday that Alabama’s attorney general cannot prosecute people or organizations who help the state’s residents seek an out-of-state abortion.   Did you keep up with last week’s newsletter? Prove it with the weekly fact quiz.

According to the Census Bureau, every state became more diverse between 2020 and 2023. By 2023, the most diverse counties were along the coast and near the Mexican border, while the Midwest, Appalachia, and parts of New England remained less diverse. The bureau’s diversity index measures the probability that two people selected at random will be from different racial and ethnic groups.

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Originally Appeared Here

Montgomery County Executive Marc Elrich (D) announced Wednesday he plans to withdraw his proposed 3.4% property tax rate increase for fiscal year 2026 and replace it with a proposal to increase the county’s income tax rate from 3.2% to 3.3%.

Elrich’s initial property tax proposal was intended to fully fund Montgomery County Public Schools’ (MCPS) $3.65 billion budget request for fiscal year 2026, which begins July 1. He said that changing to an income tax increase instead would be a more equitable solution for county taxpayers.

“This change will allow us to continue to fund both MCPS and vital County services, while mitigating the impact on individuals who might find themselves without employment because of recent action by the Federal government,” Elrich wrote in a Tuesday letter to County Council President Kate Stewart (D-Dist. 4).

In the letter, Elrich explained the proposed change was due to legislation passed by the 2025 Maryland General Assembly that allows counties to increase the formerly mandated income tax rate of 3.2% to a maximum of 3.3%. Elrich said this move is “more progressive” than his property tax hike proposal.

According to Elrich, the proposed income tax increase, coupled with the other revisions to the state’s tax code, is preliminarily estimated to generate between $70 million and $80 million for the county government in fiscal year 2026 and $60 million to $70 million annually thereafter. In his letter, Elrich said he would be sending the council his new proposal and other changes to his proposed $7.65 billion county operating budget in the coming days.

Stewart told Bethesda Today in an interview Wednesday that Elrich had not sent information about his proposed changes beyond the letter, and that the council also was not provided with details about how the estimated tax revenue was determined.

Elrich released his recommended county operating budget plan for the upcoming fiscal year on March 14. The spending plan represents an increase of 7.4% from the county’s current $7.1 billion operating budget. The council is reviewing Elrich’s proposal and is expected to approve a final budget in mid-May.

In addition to his recommended income tax hike, Elrich also is proposing some tax relief for eligible residents. He’s suggesting the county’s Income Tax Offset Credit for eligible homeowners be increased $60: from $692 to $752 “to provide meaningful relief to homeowners who may be experiencing higher overall bills due to various budget adjustments this fiscal year.”

Elrich is also proposing the county increase its match of the state’s Refundable Earned Income Tax Credit from 56% to 65% percent.

Elrich presses council to move forward with proposal

During a virtual press briefing on Wednesday, Elrich said funding his proposed operating budget will not be possible unless the council votes to pass his proposed income tax increase.

“I’m hoping that the majority of council members are amenable to this. I mean, there is no way to fund the things we need to do in the budget if we don’t do this,” Elrich said. “The worst cuts you could make are certainly to the school system, but everything else would wind up coming out of social services, environmental programs. And I’m really concerned.”

When asked by a reporter if he’d shared the idea of switching to an income tax increase with councilmembers, Elrich said he’d floated the idea to Stewart.

“We thought it would be fair, and she didn’t say ‘great,’ and she didn’t say ‘horrible.’ She basically was happy,” Elrich said.

But Stewart shared a different perspective when asked by Bethesda Today about the exchange.

“The county executive should know better than to ever speak on behalf of someone, particularly a woman elected official,” Stewart said. “We have the potential to increase our income tax. But we need to think about that very carefully. Our residents are really feeling the stress of what is happening right now in the country. We have seen taxes go up at the state level.”

Stewart told Bethesda Today that she had told Elrich that there was not enough council support to pass a property tax rate increase. Councilmembers Andrew Friedson (D-Dist.1), Evan Glass (D-At-large) and Laurie-Anne Sayles (D-At-large) had all publicly released statements saying they didn’t support the initial proposal to increase the property tax rate.

“So many of our residents are impacted directly and indirectly by the cruel and haphazard decisions that are being made by the federal government in terms of layoffs and firings and other things,” Stewart said. “We know that our [property] assessments in the county have gone up quite dramatically. Even the thought of increasing property taxes was something that many of us had very strong doubts about.”

Stewart said Elrich’s new proposal will be considered by the council. A date has not been officially set for its introduction or for a public hearing. Stewart said the council will have to balance the pressures facing residents with adequately funding the county’s programming and services.

“We need to make sure that we’re providing the services they need across the board, whether that’s for our school system or our health and human services, and we need to continue to plan for the future,” Stewart said.

County Chief Administrative Officer Rich Madaleno defended Elrich’s new proposal during Wednesday’s media briefing.

“People have to recognize that … if their federal taxes are going to come way down, increasing 0.01% for their income tax [is] in order to keep up all these services — public education, public safety, public health, all the other amazing things that we do each and every day to keep this one of the most desirable locations to live on the planet,” Madaleno said.

Originally Appeared Here

CNN
 — 

Gary Shapley, whom President Donald Trump named acting commissioner of the Internal Revenue Service earlier this week with the support of Elon Musk, will no longer serve in the role, sources told CNN — a win for Treasury Secretary Scott Bessent’s office, which had opposed his appointment.

Michael Faulkender, the deputy secretary of the Treasury, will be taking on the position, the sources said.

Shapley had the backing of Musk and congressional Republicans, while Bessent’s office had reservations, three sources familiar with the matter told CNN. Bessent was out of the country when Trump appointed Shapley.

Shapley’s ouster from the top leadership role, which was first reported by The New York Times, ends a whiplash week at the IRS, which is a bureau of the Treasury Department. Trump signed the paperwork appointing Shapley on Tuesday, triggering panic among some career civil servants.

Shapley, who helped lead the Hunter Biden investigation, had provided whistleblower testimony to Congress as Republicans claimed partisan bias by Justice officials had hindered the investigation of the son of President Joe Biden. Republicans had celebrated his ascension at the IRS after Trump had previously named him deputy chief of IRS criminal investigations.

The outgoing acting commissioner, Melanie Krause, announced Shapley’s elevation in an agency-wide email on Wednesday, according to three sources.

“I’ve made the decision to step down as acting commissioner and today is my last day in the office before I transition into a leave status,” Krause wrote. “I also have the privilege of sharing that President Trump has appointed Gary Shapley as the next acting commissioner.”

But days after his appointment, Shapley was on his way out of the top leadership role.

Bessent wrote on X on Friday that “trust must be brought back to the IRS,” and expressing confidence that Faulkender “is the right man for the moment.”

He also praised Shapley, noting that “he remains among my most important senior advisors” at Treasury and vowing that he will have a “senior government role” after completing his ongoing internal review of what the administration has described as political interference in the Hunter Biden tax fraud investigation.

A Treasury spokesperson added that Faulkender “is the United States Treasury’s choice to temporarily lead the IRS during its current transition toward a more efficient, more effective agency to best serve the American people.”

“We urge Congress to act quickly to confirm permanent leadership at the IRS to ensure its ability to best serve taxpayers going forward,” the spokesperson added.

Including Shapley’s short-lived tenure, Faulkender will be the fifth person to lead the beleaguered tax-collection agency this year. Trump’s pick for full-time commissioner – former Missouri Rep. Billy Long – awaits confirmation in the GOP-led Senate.

CNN has reached out to the IRS.

During Trump’s first term, Faulkender worked at the Treasury Department as assistant secretary for economic policy. He was confirmed in March by the Senate, in a 53-43 party line vote, to be the deputy secretary under Bessent during Trump’s second term.

Faulkender’s responses to written questions from senators shed light on his philosophy surrounding the IRS’ top priorities. On March 6, he wrote that the agency should “enforce the tax code in an even-handed manner” and raised concerns about “overly aggressive and poorly targeted audits that burden ordinary taxpayers and small businesses.”

He also offered reassurances to Democratic concerns that Trump might pressure the IRS to do his political bidding, including that he might order audits of perceived enemies.

“If confirmed, I will support the fair and impartial implementation of our nation’s tax laws, including the important safeguards against improper interference with taxpayer audits and investigations,” Faulkender said, later adding, “I will comply with all relevant laws.”

He pledged to protect taxpayer privacy and said the Treasury Department “will comply with” court orders restricting the Department of Government Efficiency from accessing highly sensitive IRS databases. Some of those limitations on Elon Musk’s team have since been relaxed while legal cases play out.

“The protection of tax returns and tax return information is essential to maintaining taxpayers’ confidence in the IRS and the tax system more generally,” Faulkender wrote. “I am absolutely committed to upholding taxpayer privacy rights… if confirmed, I will ensure that any access is in compliance with the statutory protections found in the tax code.”

CORRECTION: This story has been updated to correct that Shapley is still a criminal investigator at the IRS.

Originally Appeared Here

The Internal Revenue Service (IRS) is reportedly planning to revoke Harvard’s tax-exempt status in what would be a probably illegal move amid Donald Trump’s concerted attack on the independence of US institutions of higher education.

Trump on Tuesday called for Harvard, the US’s oldest and wealthiest university and one of the most prestigious in the world, to lose its tax-exempt status, CNN first reported.

“Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’ Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!” the US president said in a post on his Truth Social platform.

The Trump administration asked the top attorney at the IRS, the US federal tax agency, to revoke Harvard’s tax-exempt status, the Washington Post further reported. It is illegal for the president to direct the IRS to conduct an investigation or audit.

Harrison Fields, a White House spokesperson, told the Washington Post that the IRS began investigating Harvard before the president’s statement and that any investigation would be independent.

“Any forthcoming actions by the IRS will be conducted independently of the president, and investigations into any institution’s violations of its tax status were initiated prior to the president’s TRUTH,” he said, referring to the president’s social media post.

The move is a significant escalation on Trump’s attack on Harvard and his aggressive, multi-pronged assault on institutions of higher education. Stanford University has voiced support for Harvard and other schools have united in support of academic freedom.

Harvard, the flagship in the group of elite, private sector US universities known as the Ivy League, said earlier this week it would not acquiesce to a list of demands from Trump. The US education department responded by freezing $2.3bn in federal funds to the school. Even though the White House is attacking this and other institutions alleging antisemitism and negatively characterizing its teaching and academic culture as overly liberal, the Post further reported on Thursday that a review of documents showed that the government had provided no proof of lawbreaking at Harvard.

US tax law exempts charitable, religious and other social welfare organizations from paying federal taxes. Tax-exempt organizations are also barred from engaging in political activities. There is no evidence Harvard has engaged in any kind of conduct that would cause it to lose its tax exemption.

“There is no legal basis to rescind Harvard’s tax-exempt status,” Jason Newton, a Harvard spokesman, said in a statement to USA Today. “The unlawful use of this instrument more broadly would have grave consequences for the future of higher education in America.”

Losing tax-exempt status could ultimately cause Harvard to lose billions. Donors would no longer be able to take a federal tax deduction on gifts to the university, and it could have to pay tax on money generated from investment in its endowment, Nathan Goldman, a tax law professor at North Carolina State University, wrote in Forbes.

Addressing reporters in the Oval Office on Thursday, Trump called Harvard a “disgrace” and “obviously antisemitic”. He said it was his understanding that no final decision had been made yet regarding its tax-exempt status.

“Tax exempt status, I mean, it’s a privilege. It’s really a privilege, and it’s been abused by a lot more than Harvard,” Trump said, suggesting that other universities could face similar consequences. “It’s something that these schools really have to be very, very careful with.”

Originally Appeared Here