Treasury Proposes Tax Changes, Aiming to Slash Deficit and Lower Working Families' Costs in FY 2025

Treasury Unveils Bold Fiscal Proposals

The Treasury has unveiled the highly awaited Fiscal Year 2025 Revenue Proposals. These proposals are key to President Joe Biden's budget strategy and aim to keep the U.S. economy moving forward.

Secretary Janet L. Yellen highlighted the administration's bold approach. They aim to cut the deficit by approximately $3 trillion. The proposals strive for economic growth. At the same time, they want to make life cheaper for working families. This plan could lead the nation toward fiscal stability and fair wealth distribution.

What Are the Treasury's Strategic Changes?

The Greenbook is central to President Biden's push toward fiscal reform. Capitalizing on the growth seen in the American economy, which includes the most rapid recovery post-pandemic and consistently low unemployment rates for over two years, the administration wishes to continue its trajectory toward further economic growth and stability.

Fundamental policy changes proposed by the Greenbook include:

• Implementing a global minimum tax at a 21% rate to prevent a dip in corporate taxes and to establish a more equitable market for U.S. businesses.
• Increasing the corporate minimum tax rate to 21%, matching the global rate.
• Introducing a Billionaire Minimum Tax, which ensures a 25% tax rate on the top 0.01 percent of earners.
• Upgrading the tax rate on corporate stock buybacks, increasing it from 1% to 4%, thereby incentivizing companies to invest in their employees and growth over share repurchases.

ALSO READ: South Carolina Supreme Court Approves NAACP's Volunteer Legal Program for Tenants Within Limited Legal Practice

How Will This Help Working Families?

The Treasury's announcement centers on a package of measures intended to buoy households across the country. Yellen explained, "Through these measures, we aim to directly support the American workers and their families, significantly improving the quality of life and removing financial barriers."

Proposals meant to ease the financial burden on families include:

• Making health insurance tax credits permanent was first introduced in the American Rescue Plan and later in the Inflation Reduction Act.
• Revamping the Child Tax Credit to be fully refundable and available monthly was proven to cut child poverty rates in half.
• Broadening the Earned Income Tax Credit will benefit more workers without dependents.
• Enhancing the Low-Income Housing Tax Credit to increase the availability of affordable housing.

Will Tax Code Reforms Encourage Fairer Taxation?

Reforming the tax code is a cornerstone of the administration's revenue proposals, explicitly targeting areas historically benefiting the wealthy. With a nod to fairness and a drive towards simplifying tax obligations, the proposed changes include:

• We need to shut down the carried interest loophole, which enables fund managers to pay less by declaring their earnings as investments instead of wages.
• Addressing estate and gift tax strategies that currently allow for minimized taxation through complex trust mechanisms.
• Targeting specialized life insurance products that serve as tax-avoidance tools for the affluent.

Yellen noted that these proposals are designed to enforce a more balanced tax responsibility, especially among America's top earners and corporations. This aligns with President Biden's vision for a fairer, more inclusive economy.

With these plans set to unfold, the Treasury takes a definitive step toward reshaping the country's economic landscape. In enhancing the nation's financial health, the administration is committed to equitable growth, fiscal responsibility, and steadfast support for working families. The country now watches these proposals move through the legislative process, potentially setting the stage for a transformative budgetary year 2025.

RELATED TOPIC: Eligible for Child Tax Credit & Social Security? Discover How to Receive Dual Benefits

Tags

Treasury, Tax Changes, Aiming to Slash Deficit and Lower Working Families' Costs, Costs in FY 2025

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.