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Tag: taxes

  • IRS broke the law by disclosing confidential information to ICE 42,695 times: Judge

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    WASHINGTON — A federal judge said Thursday that the IRS broke the law by disclosing confidential taxpayer information “approximately 42,695 times” to Immigration and Customs Enforcement.

    U.S. District Judge Colleen Kollar-Kotelly found that the IRS had erroneously shared the taxpayer information of thousands of people with the Department of Homeland Security as part of the agencies’ controversial agreement to share information on immigrants for the purpose of identifying and deporting people illegally in the U.S.

    Her finding was based off a declaration filed earlier this month by Dottie Romo, IRS’ chief risk and control officer, which revealed that the IRS had provided DHS with information on 47,000 of the 1.28 million people that ICE requested — and, in most of those cases, gave ICE additional address information in violation of privacy rules created to protect taxpayer data.

    Kollar-Kotelly said in her Thursday decision that the agency violated IRS Code 6103, one of the strictest confidentiality laws in federal statute, “approximately 42,695 times by disclosing last known taxpayer addresses to ICE.” She called the Romo declaration “a significant development in this case.”

    “The IRS not only failed to ensure that ICE’s request for confidential taxpayer address information met the statutory requirements, but this failure led the IRS to disclose confidential taxpayer addresses to ICE in situations where ICE’s request for that information was patently deficient,” she wrote.

    The government is appealing the case, but the Thursday ruling is significant because Romo’s declaration supports the decision on appeal.

    Nina Olson, founder of the Center for Taxpayer Rights, which has sued the government over the disclosure, says “this confirms what we’ve been saying all along: that the IRS has an unlawful policy that violates the Internal Revenue Code’s protections by releasing these addresses in a way that violates the law’s requirements.”

    Representatives from the IRS and Treasury Department did not respond to Associated Press requests for comment.

    A data-sharing agreement signed last April by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem allows ICE to submit names and addresses of immigrants inside the U.S. illegally to the IRS for cross-verification against tax records. The deal led the then-acting commissioner of the IRS to resign.

    There are several ongoing cases that challenge the IRS-DHS agreement.

    Earlier this week, a three-judge panel for the U.S. Court of Appeals for the D.C. Circuit declined to issue a preliminary injunction for the immigrants’ rights group, Centro de Trabajadores Unidos, and other nonprofits that are suing the federal government to stop implementation of the agreement.

    In declining the preliminary injunction request, Judge Harry T. Edwards wrote that the nonprofit groups “are unlikely to succeed on the merits of their claim,” since the information the agencies are sharing isn’t covered by the IRS privacy statute.

    Still, two separate court orders have blocked the agencies from massive transfers of taxpayer information and blocked ICE from acting upon any IRS data in its possession. Those preliminary injunctions are still in place.

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  • Free Tax Help Available Across Oregon This Season – KXL

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    Acquired Through MGN Online on 04/18/2023

    SALEM, OR — Tax season can be stressful, but Oregon residents don’t have to go it alone. The state offers over 100 free tax help locations, plus online assistance through the United Way’s MyFreeTaxes program.

    Volunteer programs like VITA and AARP Tax-Aide help eligible taxpayers prepare returns at no cost, including:

    Taxpayers can get in-person preparation, guidance using free software, or help at WorkSource Oregon centers with computers and Wi-Fi.

    WorkSource Oregon Event Dates

    • Feb. 25 — Beaverton

    • Mar. 4 — Eugene

    • Mar. 11 — Portland

    • Mar. 18 — Lebanon

    • Mar. 25 — Bend

    Bring your tax info—W-2s, 1099s, Social Security forms, bank info, and last year’s return. If using Direct File Oregon, set up a Revenue Online account ahead of time.

    For a full list of sites and appointments, visit the Oregon Department of Revenue.

    More about:

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    Tim Lantz

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  • Feds give record $27B in loans for utility expansion in Georgia and Alabama

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    ATLANTA — Federal energy officials on Wednesday announced a record $27 billion loan to electric utilities in Georgia and Alabama, saying the loan will save customers money as the companies undertake a huge expansion driven by demand from computer data centers.

    A total of $22.4 billion will go to Georgia Power and $4.1 billion to Alabama Power. Both are subsidiaries of Atlanta-based Southern Company, one of the nation’s largest utilities. The companies plan to use the cash to build new natural-gas fueled power plants, build new transmission lines and upgrade existing power plants.

    Energy Secretary Chris Wright said the loan will result in more than $7 billion in savings over decades from a lower, federally subsidized interest rate.

    “We’re focused on driving down costs,” Wright said. He added that the loan would help ensure Southern customers “have access to affordable, reliable and secure energy for decades to come.”

    Wright and President Donald Trump have frequently made the case for their fossil fuel-friendly policies — including orders over the past nine months to keep some coal-fired plants open past planned retirement dates — as necessary to ensure reliability of the nation’s electric grid.

    Wright says the orders have saved utility customers millions of dollars and helped keep lights on during last month’s winter storm. Critics say the orders are unnecessary and have raised electric bills as utilities keep older, more expensive plants operating.

    “These loans will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers,” said Chris Womack, Southern’s chairman, president and CEO.

    The new loan comes amid scrutiny on rising utility bills, with electricity prices increasing faster than inflation in many states. There is also widespread opposition to new data centers for artificial intelligence.

    Trump in his State of the Union Tuesday announced a “ratepayer protection pledge” against higher utility bills tied to AI. He said tech companies will provide their own power as they build data centers. Trump didn’t provide details but claimed prices will go down.

    It is unclear whether any tech companies have signed pledges to build their own power plants, but Wright said on a call with reporters Wednesday that “every name you know that’s developing a data center has been in dialogue with us.”

    He cited “cooperation” from giants such as Microsoft, Google and Meta, but he didn’t specify any written agreements.

    Federal officials have long given utility loans, including $12 billion in loans that the first Trump administration and President Barack Obama’s administration guaranteed for two costly nuclear reactors at Georgia’s Plant Vogtle, partially owned by Georgia Power.

    Trump’s tax and budget bill last year reshaped the loan program to focus on increasing capacity to generate and transmit electricity. Loan guarantees under President Joe Biden focused on green energy goals.

    Gregory Beard, who directs the newly renamed Office of Energy Dominance Financing, said Wednesday that cutting interest rates and discarding Biden’s policy “will get us back on the right track in terms of affordability.”

    The loan office will review individual projects to ensure they’re financially viable, he said. “We’re not going to build this plant or deploy this capital until we are sure that it’s the right thing to do for the local community, for the local ratepayer,” Beard said in an interview.

    Those requirements don’t seem to be laid out in loan agreements that Southern released Wednesday. Jennifer Whitfield, an attorney for the Southern Environmental Law Center who represented Georgia Power expansion opponents, said the loans will save money for Georgians, but questioned their wisdom.

    “As a taxpayer, it’s hard to avoid the fact that this is a bailout paid for by every taxpaying citizen of the United States,” she said.

    Any savings for customers must be approved by the elected Public Service Commissions in Alabama and Georgia. Commissioners last July approved a three-year rate freeze requested by Georgia Power, while commissioners in Alabama approved a two-year rate freeze in December. Company officials tout the freezes when utilities nationwide have been seeking record increases. But opponents complain company-friendly regulators locked in high prices and high utility profits.

    Voters booted two Republican incumbents off the Georgia commission in November amid complaints about rising bills.

    Commissioner Peter Hubbard, one of two new Democrats, unsuccessfully tried to roll back approval for Georgia Power’s expansion in recent weeks. He said Wednesday that the declining costs of solar, wind and battery power could make new natural gas plants uneconomic over time.

    “It’s locking us into a costlier option,” he said of the federal loan. ”And so I think it just is not meeting the moment of affordability.”

    ___

    Daly reported from Washington.

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  • Trump vows ‘we will always protect Social Security, Medicare, Medicaid,’ but his signature tax cut shortened their lifespans | Fortune

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    In his State of the Union address, President Donald Trump proudly proclaimed to members of Congress and the public that the United States is “bigger, better, richer and stronger than ever before,” touting the benefits of his signature tax policy in particular, the One Big Beautiful Bill Act (OBBBA). He also claimed that his administration is working to make it easier for Americans to save for retirement. “Under this administration,” he said, “we will always protect Social Security and Medicare … We will always protect Social Security, Medicare, Medicaid.”

    But both things cannot be true.

    Despite Trump’s ongoing pledges to protect the nation’s vital social safety nets, recent economic projections reveal a starkly different reality. Sweeping legislative changes spearheaded by his administration have drastically shortened the financial lifespans of both Medicare and Social Security, accelerating their paths toward insolvency.

    For decades, surplus payroll tax revenue was socked away in trust funds, which were designed to be tapped when revenue was no longer sufficient to cover benefits.

    According to a newly updated report from the Congressional Budget Office (CBO), recent policy shifts have erased 12 years of projected solvency from the Hospital Insurance (HI) Trust Fund, which pays for Medicare Part A. The fund is now expected to be entirely exhausted by 2040, rather than 2052, as projected in March 2025. The primary culprit behind this rapid financial deterioration is the OBBBA into law, lowering tax rates and creating a temporary deduction for taxpayers aged 65 and older. While politically popular, these tax cuts significantly starved the trust fund of the revenues it normally receives from taxing Social Security benefits.

    The HI Trust Fund serves as the financial backbone for essential health services, including inpatient hospital care, skilled nursing facility stays, home health care, and hospice care. If that fund is exhausted in 2040, Medicare would be legally restricted to paying out only what it collects in revenue, triggering automatic benefit cuts. The CBO estimates these reductions would begin at an 8% cut in 2040 and steadily climb to a 10% cut by 2056.

    Meanwhile, Social Security faces a similarly accelerated timeline toward crisis. The CBO estimates that the Social Security trust fund will run out of money even sooner, by fiscal year 2032, which begins in October 2031. If Congress fails to intervene before this insolvency date, benefits would be strictly limited to incoming revenue. The Committee for a Responsible Federal Budget estimates that a typical couple turning 60 today would face a devastating $18,400 annual cut to their retirement benefits when the fund runs dry.

    Trump laid into Democrats for voting against OBBBA, which he called “these really important and very necessary massive tax cuts. They wanted large-scale tax increases to hurt the people instead. But we held strong and with the great Big Beautiful Bill we gave you no tax on tips, no tax on overtime, and no tax on Social Security for our great country.”

    Reducing tax revenue for these programs, though, is hastening their looming fiscal crisis. Alongside lower projected payroll tax revenues, this policy shift enacted during the Trump administration has starved the safety net of critical future funding.

    Cuts to come in the future?

    Once the trust funds are exhausted, additional money must be found somewhere or else benefits must be slashed. Another source is discretionary money.

    But Bernard Yaros, lead U.S. economist at Oxford Economics, has warned that funding Social Security and Medicare with general revenue could trigger a negative reaction in the bond market, sparking a sustained increase in interest rates, ultimately forcing lawmakers to make painful, drastic cuts to nondiscretionary programs to head off a full-blown fiscal crisis.

    Faced with these looming cliffs, lawmakers may be tempted to simply finance the shortfalls with more national debt rather than making tough political choices to hike taxes or reduce benefits. However, economists warn this could spark a severe financial crisis. Veronique de Rugy, a senior research fellow at the Mercatus Center, cautioned in a Creators Syndicate op-ed that financial markets will quickly account for the additional borrowing.

    “Inflation may not wait for debt to pile up,” de Rugy warned, noting it could “arrive the moment Congress commits to that debt-ridden path”.

    Addressing this looming shortfall will require significant legislative action. To restore the 12 years of lost Medicare solvency alone, lawmakers will be forced to increase taxes, slash health care payments, or implement a politically fraught combination of these approaches—eventually. That flies directly in the face of the politically popular tax cuts that Trump hailed as so significant, on the year of the United States’ 250th birthday.

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    Nick Lichtenberg

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  • EU Hits Pause on US Trade Deal as It Seeks Clarity Over Latest Trump Maneuver

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    FRANKFURT, Germany (AP) — Frustrated European officials pushed Monday for clarification on how U.S. President Donald Trump’s declaration of a 15% global tax on imports would affect the trade deal they struck with Trump this summer as EU legislators hit pause on the deal’s ratification until they get clarity.

    The European Parliament’s trade committee postponed a committee vote on ratification after Trump said he would impose the new tariff, after the U.S. Supreme Court struck down his use of an emergency powers law to set new import taxes. Trump then turned to another section of trade law to justify his imposition of the 15% global rate, which take effect Tuesday.

    The EU position is expressed in five words: “A deal is a deal,” said commission spokesman Olof Gill. “So now we are simply saying to the US, it is up to you to clearly show to us what path you are taking to honor the agreement.”

    The US-EU deal called for a 15% cap on tariffs on most European goods imports, while tariffs on US industrial goods would be lowered to zero. While the deal burdened consumers and businesses with a tariff increase from the previous average of 4.8%, it also gave businesses certainty so they could plan – a factor credited with helping Europe avoid a recession last year.

    Since the new 15% rate announced Saturday would be applied on top of the previous tariffs, it would break the agreed ceiling on tariffs, said Bernd Lange, chair of the parliament’s trade committee. Legislators postponed a committee vote on the agreement scheduled for Tuesday.

    Questions surrounded other trade deals done with individual countries including Brazil, India and Britain. For instance, Britain agreed a 10% maximum tariff with the US, while India settled on 18% and Vietnam accepted 20%. Although the Supreme Court decision did not directly affect bilateral deals, they were negotiated using threats of imposing the now-invalidated tariffs as leverage. However re-opening those deals could backfire because Trump has made clear he will pursue tariffs under other laws than the one the Supreme Court said he could not apply.

    US Trade Representative Jamison Greer said Sunday on US network CBS’ “Face the Nation” program that the administration had made clear to negotiating partners that Trump was intent on tariffs whether the Supreme Court ruled against him or not, that “whether we won or lost, there were going to be tariffs.”

    He said that the bilateral deals “are good deals, we expect to stand by them, we expect our partners to stand by them.”

    Moving from country-specific tariffs to the flat 15% global tariff “will have considerable implications elsewhere,” said Atakan Bakiskan, US economist at Berenberg bank. The new tariff means a reduced rate for some countries, for example Brazil, which faces a reduction of nearly 15 percentage points and China, which sees a reduction of nearly 10 percentage points.

    Under the law Trump relied on, these latest tariffs are in effect for only 150 days unless Congress votes to extend them. Trump could use that time to search for other legal provisions that would support his actions.

    While uncertainty hits European companies, it puts pressure on the U.S. economy as well, where consumers and companies pay the tariffs on goods purchased from abroad. “Uncertainty around trade policy appears here to stay – putting continued pressure on the US economy,” Bakiskan said.

    Copyright 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

    Photos You Should See – Feb. 2026

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    Associated Press

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  • Va. lawmakers reshape Youngkin’s final budget with focus on affordability, no new taxes – WTOP News

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    Both chambers are expected to pass their respective proposals next week before negotiators reconcile differences in a conference committee. Notably, neither plan includes new taxes.

    The Virginia General Assembly’s money committees on Sunday rolled out sweeping amendments to former Gov. Glenn Youngkin’s proposed two-year, $212 billion state budget, with both the House and Senate advancing plans that emphasize affordability, backfill federal funding gaps and avoid new taxes as they reshape the Republican’s final spending blueprint.

    The Senate Finance Committee’s Senate Bill 30 would end a data center sales tax exemption and set the stage for the state to potentially reap millions in revenue from the industry.

    The spending plan would also deliver $100 in tax rebates to individual filers and $200 to joint filers, raise the standard deduction, protect Medicaid, fund 3% annual teacher raises, invest $50 million in affordable housing and provide $205.7 million for Metro over the biennium.

    The House Democratic plan, branded the “Affordable Virginia Budget,” similarly prioritizes housing, health care and education, but diverges in some spending details — including larger direct investments in the Virginia Housing Trust Fund and a broader package of worker protections and labor initiatives.

    Both chambers are expected to pass their respective proposals next week — the House on Thursday — before negotiators reconcile differences in a conference committee in the coming weeks.

    Notably, neither plan includes new taxes, which prompted Sen. Richard Stuart, R-King George, to vote for the Senate budget in committee, while three of his Republican colleagues abstained.

    “I can’t tell you how much I appreciate the fact that there are no tax increases in this budget, that you’ve kept a very conservative forecast of revenues going forward, that we have not built the base budget, but we’re using one-time monies,” Stuart told Senate Finance Committee Chair Louise Lucas, D-Portsmouth.

    “But more than that, I’ve been here for a long time, and you are the first Finance chair that I remember that actually took and listened to our considerations and our suggestions, and I very much appreciate that. And I just wanted to say that Madam Chair.”

    Lucas, visibly surprised, replied: “Thank you very much, I really appreciate that compliment, I didn’t see that one coming. Where are the tissues?”

    Reworking Youngkin’s final budget

    Youngkin on Dec. 17 unveiled his final proposed budget, pitching a plan he said built on record revenue growth and sustained his administration’s tax-relief priorities as Democrats prepared to take control of both the General Assembly and the governor’s office.

    The proposal anticipated continued economic strength, with what Youngkin described as a “prudent” revenue forecast rooted in job and business growth. It preserved reserve balances while advancing nearly $730 million in new, ongoing tax cuts and maintaining income tax conformity with recent federal policy changes.

    On the spending side, Youngkin targeted public safety, health care and education, including bonuses and salary increases for teachers and state employees, while projecting a balanced budget over the six-year forecast window. He acknowledged at the time that his successor and the Democratic-led legislature would ultimately reshape the plan.

    Senate Democrats argued Sunday that his outgoing proposal left “significant structural deficiencies,” particularly by not planning for new federal cost shifts under HR1, including potential state matching requirements for food assistance.

    Lucas said the Senate amendments were built around affordability and long-term fiscal balance.

    “It’s the entire mantra of this session,” she said. “The committee has delivered a budget focused on affordability, while still maintaining structural balance.”

    Data centers and tax cuts

    A central change in the Senate plan would allow the data center sales and use tax exemption to end on Jan. 1, 2027. Originally projected to cost $1.54 million annually, the exemption now forgoes roughly $1.6 billion per year in revenue, according to Senate Democrats.

    “In the most recent fiscal year alone, they benefited from more than $33.2 billion dollars in tax-free computer equipment purchases,” Lucas said. “We’re asking data centers to pay their fair share in sales tax to help deliver our core services — education, transportation, and social services.”

    By ending the exemption, the Senate would direct nearly $300 million to transportation across all modes and make one-time investments in water infrastructure, Lucas said, while avoiding additional tolls or fees.

    The Senate plan also includes a one-time tax rebate to be issued around Oct. 15 and increases the standard deduction by $450 for individuals and $900 for married filers.

    “By exempting more income from taxation, Virginians get immediate relief in their paychecks. That’s affordability,” Lucas said.

    Health care and federal uncertainty

    Health and Human Resources Subcommittee Chair Creigh Deeds, D-Charlottesville, said the Senate confronted rising Medicaid costs projected at $3.2 billion in general fund spending through fiscal 2028.

    Medicaid and the Children’s Health Insurance Program cover 1.8 million Virginians, he said. The subcommittee adopted $591.2 million in savings strategies and set aside a $90 million reserve while restoring the prenatal care program.

    With enhanced federal Affordable Care Act tax credits having expired Dec. 31, Deeds warned that up to 100,000 Virginians could lose coverage. The Senate includes $200 million in the first year to subsidize premiums.

    The House proposal similarly emphasizes backfilling federal reductions.

    Health and Human Resources Subcommittee Chair Rodney Willett, D-Henrico, said the House recommends $79.1 million to reduce premium spikes, $45 million to restore federal reductions for core public health services and more than $211 million to cover new state cost shares for SNAP benefits.

    “We feel it is a prudent and responsible decision to act now,” Willett said, to ensure uninterrupted access to food benefits.

    The House plan also includes $11.1 million for a sickle cell disease package and funding to improve maternal and infant health programs.

    House Appropriations Committee Chair Luke Torian, D-Prince William, said his chamber’s budget “backfills those holes, not out of politics, but out of prudence.”

    “This is a balanced budget,” Torian said. “It is built on conservative revenue assumptions, maintains healthy reserves, and prepares us for continued uncertainty ahead.”

    Education and housing

    On education, the Senate proposes 3% raises each year for teachers and state employees, along with $50 million for a childcare pilot to match employer contributions.

    Education Subcommittee Chair Mamie Locke, D-Hampton, said the Senate plan adds more than $627 million in general fund support over the biennium, including increased funding for at-risk students, special education and school construction through a 1% local option sales tax for renovation projects, pending local referendums.

    In higher education, the Senate recommends $159.4 million in additional funding, including $65 million for need-based financial aid and $32.5 million for workforce credential grants.

    The House budget also invests heavily in K-12 and early childhood education.

    Elementary and Secondary Education Subcommittee Chair Delores McQuinn, D-Richmond, said it includes $400 million in one-time flexible funding for school divisions and $160 million in additional special education support, along with $160 million for early childhood education to clear childcare waitlists for families earning below 85% of the state median income.

    On housing, the Senate wants to invest $50 million in its housing trust fund and $13 million for eviction prevention, while the House directs $187.5 million to the Virginia Housing Trust Fund, establishes a $25 million revolving loan fund for mixed-income housing and provides $17 million for eviction prevention.

    Balancing new revenues

    Anne Oman, staff director for the House Appropriations Committee, said the caboose budget signed by Gov. Abigail Spanberger on Friday increased current-year general fund resources by $3.1 billion, leaving $2.3 billion to carry into the new biennium.

    The proposed budget assumes modest 3% to 3.5% annual revenue growth, though year-to-date collections are running at 6.9%.

    Adjustments eliminate Youngkin’s proposed tax cuts, capture nearly $80 million from a business-ready site acquisition fund and recognize potential revenue from skill games legislation, projected at about $176 million annually if enacted.

    After accounting for $1.8 billion in additional spending, the House plan leaves an unappropriated balance of $15.2 million at the end of the biennium, Oman said.

    Despite bipartisan moments, some Republicans voiced caution.

    “I want to say thank you to you,” Senate Minority Leader Ryan McDougle, R-Hanover, told Lucas. “This has been a challenging process, and I appreciate the fact that you and I can have candid conversations as we’ve worked through this.”

    He added: “Today, I am going to vote to abstain, because of some of the significant physical impacts that I’m concerned about in Virginia as we continue to discuss. This budget has a significant amount of additional revenues up and above the proposed budget, and I think we need to have a serious conversation about where those revenues come from, how they impact Virginians, and continue to discuss them as we go forward.”

    Get breaking news and daily headlines delivered to your email inbox by signing up here.

    © 2026 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.

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    LaDawn Black

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  • Bernie Sanders and Gavin Newsom become adversaries over push to tax California billionaires

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    LOS ANGELES — As national Democrats search for a unifying theme ahead of the fall’s midterm elections, a California proposal to levy a hefty tax on billionaires is turning some of the party’s leading figures into adversaries just when Democrats can least afford division from within.

    Bernie Sanders will be in Los Angeles campaigning Wednesday for the tax proposal that has the Silicon Valley in an uproar, with tech titans are threatening to leave the state. Democratic Gov. Gavin Newsom is among its outspoken opponents, warning that it could leave government finances in crisis and put the state at a competitive disadvantage nationally.

    Sanders is planning a late afternoon rally near downtown, and in the past he has turned out overflow crowds in the heavily Democratic city. The Vermont senator, a democratic socialist, is popular in California — he won the 2020 Democratic presidential primary in the state in a runaway. He’s been railing for decades against what he characterizes as wealthy elites and the growing gap between rich and poor.

    A large health care union is attempting to place a proposal before voters in November that would impose a one-time 5% tax on the assets of billionaires — including stocks, art, businesses, collectibles and intellectual property — to backfill federal funding cuts to health services for lower-income people that were signed by President Donald Trump last year.

    Sanders wrote on the social platform X that he strongly supports the tax “at a time of unprecedented and growing wealth and income inequality.”

    “Our nation will not thrive when so few own so much,” Sanders wrote.

    Debate on the proposal is unfolding at a time when voters in both parties express unease with economic conditions and what the future will bring in a politically divided nation. Distrust of government — and its ability to get things done — is widespread.

    The proposal has created a rift between Newsom and prominent members of his party’s progressive wing, including Sanders, who has said the tax should be a template for other states.

    “The issues that are really going to be motivating Democrats this year, affordability and the cost of health care and cuts to schools, none of these would be fixed by this proposal. If fact, they would be made worse,” said Brian Brokaw, a longtime Newsom adviser who is leading a political committee opposing the tax.

    Midterm elections typically punish the party in control of the White House, and Democrats are hoping to gain enough U.S. House seats to overturn the chamber’s slim Republican majority. In California, rejiggered House districts approved by voters last year are expected to help the party pick up as many as five additional seats, which would leave Republicans in control of just a handful of districts.

    “It is always better for a party to have the political debate focused on issues where you are united and the other party is divided,” said Eric Schickler, a professor of political science at the University of California, Berkeley. “Having an issue like this where Newsom and Sanders — among others — are on different sides is not ideal.”

    With the idea of taxing billionaires popular among many voters “this can be a good way for Democratic candidates to rally that side and break through from the pack,” Schickler added in an email.

    It’s already trickled into the race for governor and contests down the ballot. Republicans Chad Bianco and Steve Hilton, both candidates for governor, have warned the tax would erase jobs. San Jose Mayor Matt Mahan, a Democratic candidate for governor, has said inequality starts at the federal level, where the tax code is riddled with loopholes.

    Coinciding with the Sanders visit and an upcoming state Democratic convention this weekend, opponents are sending out targeted emails and social media ads intended to sway party insiders.

    It’s not clear if the proposal will make the ballot — supporters must gather more than 870,000 petition signatures to place it before voters.

    The nascent contest already has drawn out a tangle of competing interests, with millions of dollars flowing into political committees.

    Newsom has long opposed state-level wealth taxes, believing such levies would be disadvantageous for the world’s fourth-largest economy. At a time when California is strapped for cash and he is considering a 2028 presidential run, he is trying to block the proposal before it reaches the ballot.

    Analysts say an exodus of billionaires could mean a loss of hundreds of millions of tax dollars for the nation’s most populous state. But supporters say the funding is needed to offset federal cuts that could leave many Californians without vital services.

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  • Comparing tax burdens, New York at (or near) the top of the list

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    In a line of attack that Empire State Republicans have deployed over many election cycles, Nassau County Executive Bruce Blakeman has focused on New York’s tax climate as he mounts a campaign to unseat Gov. Kathy Hochul.

    The Long Island Republican said New York ranks No. 1 in the nation for highest individual tax burden.

    Given the state’s notorious tax reputation, we were curious if it indeed has the highest tax burden in the country. 

    There are several ways to measure a tax burden, and different analyses result in different rankings. Some rankings include property and sales taxes. Some just one or the other. 

    We started with the Tax Foundation, which completes extensive studies of tax policies in every state. The last study of state and local tax burden was from 2022, and New York was at the top of the list, with an effective tax rate of 15.9%. The conservative-leaning think tank defined “tax burden” as state and local taxes paid by residents divided by that state’s share of net national product. This study took into account tax incidence, which measures which entity pays a tax, both under the law and in the economy. 

    Though this data is older, this analysis “comes closest to answering the question of which state actually has the highest burdens on residents, and on that, New York is unequivocally highest,” said Jared Walczak, senior fellow at the Tax Foundation. 

    The think tank also measured how much state and local governments collect per person in every state, and it published its findings in 2025. The nationwide average of state and local tax burden per capita was $7,109, according to U.S. Census data from 2022. In the Tax Foundation’s study, the District of Columbia was the costliest place to live when it comes to local taxes, collecting $14,974. But New York was the costliest state, with the highest combined state and local per capita tax burden at $12,685. California came in second. 

    Another study from the Tax Foundation found that when tax collections are calculated as a percentage of personal income, New Mexico came in at the top, and New York placed second.  

    When individual income taxes are taken into account, New York ranks second behind Oregon. It’s worth noting the Beaver State has no sales tax. 

    “There isn’t just one single way to define state tax burdens,” Walczak said. “But by a measure that accounts for tax incidence, New York has the highest tax burdens – and by any conceivable measure, it’s at or near the top,” he said.  

    WalletHub, a personal finance company, found that New York has the second-highest tax burden in the country in a study it published in April. The site looked at the proportion of total personal income that people pay in state and local taxes, including personal income, sales, excise and property taxes.   

    New York’s overall tax burden as a share of personal income was 13.56%, while Hawaii had the highest, at 13.92%. Considering only personal income taxes, New York is first, at 5.76%. Counting only property taxes, Vermont ranks first for that burden, with New York fourth. The total sales and excise tax burden rankings has New York at No. 22.  

    New York has the highest tax burden when the state and local personal income tax revenues are divided by the personal income of all the people living in that state, based on U.S. Census data from 2022, said Aravind Boddupalli, a senior research associate at the Urban-Brookings Tax Policy Center. 

    But these rankings miss the fact that there are high-income earners in New York, and that New York has a relatively progressive income tax structure, meaning that people who earn more pay more in income taxes. The metrics don’t measure fairness, he said. 

    “There are a lot more people with a lot more resources in New York, and the tax burden metric measures revenue raising, not necessarily who pays how much,” he said. 

    After Blakeman made his claim, the Citizens Budget Commission, a centrist New York-based think tank, found that state and local governments in New York collect the highest taxes per person and the second highest per $1,000 of personal income, based on 2023 data. 

    In 2018, when Republican Marc Molinaro ran for governor, he claimed that New York had “among the highest tax burdens of any state in the nation,” and PolitiFact rated it True. 

    We reached out to Blakeman’s spokesperson but did not hear back. The state Republican Party responded, saying that it uses the Tax Foundation competitiveness index, which in 2026 ranked New York the least competitive state. Individual taxes, for which New York ranks 50th, is part of that analysis. 

    Our ruling 

    Tax analysts have found that the tax burden in New York is at the top, or near the top, depending upon how you calculate tax burden. An expert said that one of the best analyses shows New York “unequivocally highest,” though the data is nearly four years old. A different study from nearly a year ago shows New York at second place in a contest no state wants to win. 

    Blakeman’s statement is accurate, but needs some context, so we rate it Mostly True. 

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  • Average tax refund is nearly 11% higher so far this year, IRS data shows

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    Early tax filers are enjoying bigger refunds compared to the same time last year, according to the latest figures from the Internal Revenue Service.

    As of Feb. 6, 2026, tax refunds averaged $2,290, up nearly 11% from the same point last year. “Average refund amounts are strong,” the IRS said in a statement last week. 

    Forecasters have predicted filers would benefit from larger checks this year due to a series of new tax provisions included in the “one big, beautiful” bill signed by President Trump in July 2025. One financial services firm, Piper Sandler, estimated the average payment would increase by about $1,000 per filer. 

    The biggest benefits are likely to flow to those in the top 10% of households, experts have said. Lower-earning taxpayers will also see gains, but they aren’t as likely to enjoy as big a jump in refund amounts as higher-income households, according to a Jan. 30 analysis from investment firm Principal Asset Management. 

    Tax season officially kicked off on Jan. 26, 2026. As of early February, the IRS has received nearly 22.4 million returns, slightly down from 23.6 million the same time last year, the agency’s data shows. 

    People who file electronically usually get their refunds in fewer than 21 days, according to the IRS.

    Refund sizes likely to expand 

    Refunds will likely grow in size as tax season progresses. That’s in part because lower-income Americans tend to file early, while wealthier households, which have more complex tax returns, take longer to file.

    The average refund amount typically starts small, peaks in mid-February and then slips slightly through the end of tax season, Andrew Lautz, director of tax policy for the Bipartisan Policy Center, a Washington, D.C.-based think tank, said in a policy brief last month. Last year, the average refund was $2,939, according to the Bipartisan Policy Center.

    The IRS typically releases a fresh batch of data each week during tax season and provides a few subsequent updates after filing concludes on April 15. 

    The agency said it expects refund numbers to be higher when it posts an update on Feb. 27. That’s because by that point, the agency will have processed some of the refunds of Americans who claimed the Earned Income Tax Credit and Additional Child Tax Credit, refundable tax credits designed for low- to moderate-income working families.

    Edited by

    Aimee Picchi

    In:

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  • How the rich pass on their wealth. And how you can too

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    NEW YORK — Death and taxes may be inevitable. A big bill for your heirs is not.

    The rich have made an art of avoiding taxes and making sure their wealth passes down effortlessly to the next generation. But the tricks they use – to expedite payouts to heirs and avoid handing money to the government – can also work for people with far more modest estates.

    “It’s a strategic game of chess played over decades,” says Mark Bosler, an estate planning attorney in Troy, Michigan, and legal adviser to Real Estate Bees. “While the average person relies on a simple will, the well-to-do utilize a different playbook.”

    First, consider the facts: Despite widespread misconceptions, only estates of the very richest Americans are generally subject to taxes. At the federal level, estates of over $15 million typically trigger taxes. At the state level, 16 states and the District of Columbia do collect estate or inheritance taxes, according to the Tax Foundation, sometimes with lower exemptions than the IRS, but still at thresholds targeting millionaires.

    While most people can pass on what they have without worrying about their heirs being caught in a web of taxes, it can require planning to escape a messy process that can hold up estates for years and cost families significantly in court fees and lawyer bills.

    The solution at the center of many estate planners’ designs is a trust.

    Though trusts conjure images of complex arrangements utilized by the uber-rich, they are relatively simple tools that can make sense for many people. They come with expense, often costing thousands of dollars in lawyer fees to set them up. But for a retired couple with a paid-off house, 401(k)s and a portfolio of investments, they can ease the passing of assets to heirs.

    Among the reasons: Even if you aren’t leaving enough behind to trigger taxes, your estate can get tied up in probate court, which typically assesses fees based on an estate’s total value.

    “You are leaving what might have gone to your children or other loved ones to attorneys and the courts,” says Renee Fry, CEO of Gentreo, an online estate planner based in Quincy, Massachusetts. “Anywhere from 3 to 8% of an estate might be lost.”

    Trusts can allow an estate to sidestep court altogether and to shield it from public view by keeping details out of public records. Some people also use them to protect their savings if they someday need nursing home care and would prefer to qualify for a government-paid stay under Medicaid instead of paying themselves.

    Imagine being an investor in a stock like Nvidia that has soared in recent years. Now imagine being able to reap the profit of selling your shares without paying tax.

    It’s possible with one caveat: You have to die.

    That scenario, known in estate lingo as “step-up,” allows many rich families to grow their wealth while ensuring their heirs won’t be saddled with the bill.

    It works like this: Say your savvy uncle bought 100 shares of Nvidia when it began trading in 1999 at $12 a share. Between splits and a soaring price, that $1,200 investment would be worth more than $9 million today. If he left it all to you, you could sell the shares owing little or no tax because gains are calculated from the day he died, not the day he bought it.

    Benjamin Trujillo, a partner with the wealth advisory firm Moneta, based in St. Louis, Missouri, says it all seems “like a magic trick.” And it’s completely legal.

    “Wealth transfer looks like smoke and mirrors,” Trujillo says. “Assets like stocks can quietly grow for decades and, when they’re inherited, the tax bill often disappears.”

    Lawmakers have sometimes proposed limits on the “step-up” rule but at least for now, it remains, making it one of the biggest not-so-secret weapons in the arsenals of those looking to create generational wealth. If stocks aren’t your forte, “step-up” applies to other types of investments too, including artwork, real estate and collectibles.

    Ever get a prompt on one of your accounts asking you to name a beneficiary? It’s more than a confusing (or annoying) nudge from your brokerage. Estate planners say it is one of the simplest ways to ease the transfer of assets to loved ones after you die.

    Regulations vary from place to place, but many banks and brokerages allow you to name a beneficiary to whom the funds will be transferred to upon your death.

    “One of the easiest ways to transfer assets hassle-free,” says Allison Harrison, an attorney in Columbus, Ohio, who focuses on estate planning.

    Beneficiary designations generally override wills, so it’s important to make sure yours are up to date to avoid the mess of having, say, an ex-spouse end up with everything you saved.

    All of this requires planning, but experts say investing a little time in mapping out your estate is one of the moves that separates the rich from the less well-off.

    “Wealthy families plan,” says Fry. “They don’t leave assets and decisions unprotected.”

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  • Japan’s economy barely grows in the last quarter

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    TOKYO — Japan’s economy expanded at an anemic 0.2% annual pace in the last quarter, the government reported Monday, with growth for all of 2025 at just 1.1%.

    Private consumption rose at a 0.4% annualized pace in October-December, but that was offset by a 1.1% drop in exports, the latest seasonally adjusted preliminary data show.

    Japan’s export-reliant economy has been shaken by President Donald Trump’s tariffs, but has been growing at a lackluster pace for years. Prime Minister Sanae Takaichi is expected to roll out policies to help revive the economy after a landslide victory in a general election earlier this month.

    Takaichi has promised to spend more and to suspend Japan’s sales tax on food, among other measures.

    Japan’s GDP contracted 0.7% in July-September, quarter-to-quarter, after growing 0.5% in April-June. Since the economy returned to growth in the latest quarter, the country narrowly avoided a technical recession, which is two straight quarters of contraction.

    On a quarterly basis, the economy grew 0.1% in October to December, the Cabinet Office reported.

    The 1.1% expansion last year was the fastest since 2022, when Japan was recovering from the disruptions caused by the COVID-19 pandemic.

    The government is projecting that the economy will expand at an average rate of about 0.6% in the near term.

    ___

    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

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  • Tax season is here. Here’s what you need to know for stress-free filing

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    NEW YORK — Tax season is underway and you have until April 15 to file your return with the IRS. If you want to avoid the stress of the looming deadline, start getting organized as soon as possible.

    “Don’t wait until the last minute but also don’t rush,” said Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals,

    Gathering all your documents, signing up for direct deposit and keeping copies of your tax returns are some of the best practices when it comes to preparing to fill out your taxes. This year, due to the Republican tax and spending bill that President Donald Trump signed over the summer, there are new deductions taxpayers should know about.

    Among them are no tax on tips, no tax on overtime, deductions for car loan interest, and deductions for people who were 65 or older by Dec. 31, said Miguel Burgos, a certified public accountant and an expert for TurboTax.

    The average refund last year was $3,167. This year, analysts have projected it could be $1,000 higher, thanks to changes in tax law. More than 165 million individual income tax returns were processed last year, with 94% submitted electronically.

    If you find the process too confusing, there are plenty of free resources to help you get through it.

    Here are some things you need to know:

    While the required documents might depend on your individual case, here is a general list of what everyone needs:

    —Social Security number

    —W-2 forms, if you are employed

    —1099-G, if you are unemployed

    —1099 forms, if you are self-employed

    —Savings and investment records

    —Any eligible deduction, such as educational expenses, medical bills, charitable donations, etc.

    —Tax credits, such as the child tax credit, retirement savings contributions credit, etc.

    To find a more detailed document list, visit the IRS website.

    O’Saben recommends gathering all of your documents in one place before you start your tax return and also having your documents from last year. Taxpayers can also create an identity protection PIN number with the IRS to guard against identity theft. Once you create a number, the IRS will require it to file your tax return.

    — Change to standard deduction

    The standard deduction for single taxpayers is $15,750 for this year. For married couples filing jointly, it has increased to $31,500. For heads of households, the standard deduction is $23,625.

    — Change to state and local taxes (SALT) deduction

    The deduction cap on state and local taxes has increased from $10,000 to $40,000. The change is also known as the Working Families Tax Cut and was enacted in July 2025.

    “This is a big benefit, especially for states like California, New York, and New Jersey, that have a higher state income tax,” said Keith Hall, president and CEO of the National Association for the Self-Employed and a certified CPA.

    The SALT deduction is a federal tax deduction for some state and local taxes paid during the year. The total deduction had been capped at $10,000 since it started in 2018.

    People who have not previously itemized their SALT deduction might want to consider it this year. To know if you should itemize your deductions, O’Saben recommends that you ask yourself the following questions: Did you pay state taxes? Did you pay property taxes? Do you have mortgage interest? Do you have charitable contributions?

    —Deductions for tips

    What is known as “no tax on tips” is not quite accurate. This new deduction is only for qualified tips and is subject to income limitations.

    “It can be cash, it can be electronic as well. But the main thing is, hey, it has to be voluntary (tips),” Burgos said.

    The maximum annual deduction is capped at $2,500. The deduction phases out for taxpayers with modified adjusted gross income over $150,000, or $300,000 for joint filers. The tax deduction is also limited to specific industries where tipping is common practice. Some of the included industries are bartenders, food servers, musicians and housekeeping cleaners.

    To claim the new tax break, you will need to fill out a new tax form called Schedule 1-A.

    —Additional Schedule 1-A deductions

    Schedule 1-A is an IRS form used to claim and calculate four tax deductions originating from the tax and spending bill. They are the change in state and local tax deduction, deduction on qualified tips, and car loan and senior deductions.

    IRS Direct File, the electronic system for filing tax returns for free, will not be offered this year. For those who make $89,000 or less per year, IRS Free File offers free guided tax preparation; you can choose from eight IRS partners, such as TaxAct and FreeTaxUSA.

    Beyond companies such as TurboTax and H&R Block, taxpayers can also hire licensed professionals, such as certified public accountants. The IRS offers a directory of tax preparers across the United States.

    The IRS also funds two programs that offer free tax help: Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE). People who earn $69,000 or less a year, have disabilities, or are limited English speakers, qualify for the VITA program. Those who are 60 or older qualify for the TCE program. The IRS has a site for locating organizations hosting VITA and TCE clinics.

    Many people fear getting in trouble with the IRS if they make a mistake. Here’s how to avoid some of the most common ones:

    —Double-check your name on your Social Security card

    When working with clients, O’Saben asks them to double-check their number and their legal name, which can change when people get married.

    “If you got married last year and you now want to use your married name, that married name doesn’t exist if you haven’t filed it with Social Security,” O’Saben said.

    —Search for online tax statements

    Many people opt out of physical mail but when you do, it can also include your tax documents.

    “These documents may actually be available online because you may have chosen to have paperless contact. And because of that, you may need to go get those documents yourself,” O’Saben said.

    —Make sure you report all of your income

    If you had a second job in 2025, you need the W-2 or 1099 form for each job.

    In general, if you make a mistake or you’re missing something in your tax records, the IRS will audit you. An audit means that the IRS will ask you for more documentation.

    Currently, the tax credit is $2,200 per child but only $1,700 is refundable. This refund is called the Additional Child Tax Credit. To claim the Additional Child Tax Credit, you must have at least $2,500 of income for the tax year.

    You qualify for the full amount of the Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 if filing a joint return). Parents and guardians with higher incomes may be eligible to claim a partial credit.

    You can find more details about the child tax credit here.

    Last September, the IRS began phasing out paper tax refund checks. If you’re expecting a tax refund, the IRS recommends you sign up for direct deposit.

    Tax season is prime time for tax scams, O’Saben said. These scams can come via phone, text, email and social media. The IRS uses none of those means to contact taxpayers.

    Sometimes scams are even operated by tax preparers, so it’s important to ask lots of questions. If a tax preparer says you will get a refund that is larger than what you’ve received in previous years, for example, that may be a red flag, O’Saben said.

    If you can’t see what your tax preparer is working on, get a copy of the tax return and ask questions about each of the entries.

    It’s always good practice to keep a record of your tax returns, just in case the IRS audits you for an item you reported years ago. O’Saben recommend keeping copies of your tax return documents five to seven years.

    ___

    The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

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  • 4 Smart Moves to Cut Your 2025 Tax Bill Under New Rules

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    The One Big Beautiful Bill Act made some long-awaited permanent changes to the tax code. It also introduced short-term tax breaks that come with strict limits and phaseouts, and many of them are only available through 2028 or 2029. Here are four ways to get the most out of the OBBBA’s temporary provisions as you file your 2025 taxes and plan ahead.

    The OBBBA temporarily boosts the state and local tax deduction cap, or SALT, from $10,000 to $40,000 (for married couples filing jointly and single filers). This higher cap applies from 2025 through 2029.

    Run the numbers: For 2025, the standard deduction is $31,500 for married couples and $15,750 for singles. If your total itemized deductions — including mortgage interest, charitable giving, and state and local taxes (up to the new $40,000 cap) — add up to more than your standard deduction, you should itemize.

    Watch your income: The new $40,000 SALT cap isn’t for everyone. It begins to phase out if your modified adjusted gross income is over $500,000 (for all filers). If your MAGI reaches $600,000, your SALT deduction reverts to the original $10,000 limit.

    The OBBBA introduced several temporary above-the-line deductions (available whether you itemize or not) to help middle-income workers. But they have very strict income and benefit limits.

    The qualified overtime pay deduction: Capped at $25,000 for married couples filing jointly and $12,500 for singles. Only the extra “half-time” portion of your time-and-a-half pay qualifies for the deduction. For a married couple, this benefit begins to disappear if your MAGI hits $300,000 and is entirely gone once your MAGI reaches $550,000.

    The qualified tips income deduction: Allows you to write off qualified tip income up to $25,000 per tax return, whether you file as married or single. The deduction is only available for tips that are formally reported on a Form W-2 or Form 1099. It phases out sharply for higher earners, starting at a MAGI of $300,000 for married couples and $150,000 for singles, and is fully eliminated at $550,000 and $400,000, respectively.

    The auto loan interest deduction: This temporary deduction allows you to write off up to $10,000 of interest paid on a loan for a new, personal-use vehicle with final assembly in the US. (Leases are excluded.) It starts to phase out at $200,000 for married couples and $100,000 for singles and is completely gone by $250,000 and $150,000.

    If you are 65 or older, the OBBBA offers a new, temporary deduction for seniors of up to $12,000 for married couples ($6,000 per eligible spouse) and $6,000 for single filers. This is a welcome tax break, but it’s fragile.

    Beware the MAGI trap: This deduction begins to disappear for married couples with a MAGI over $150,000 and for singles over $75,000.

    Model Roth conversions for 2026: If you are a senior who is close to the $150,000 MAGI limit, a Roth conversion done in 2026 could push your income over the threshold, causing you to lose this entire $12,000 deduction. Work with your adviser to model any planned 2026 conversions.

    Many of the OBBBA’s most valuable temporary provisions are income-sensitive, particularly those new targeted deductions and the elevated SALT cap. Keep these rules in mind for 2025 filing and 2026 tax planning.

    For your 2025 return: You can still influence your 2025 MAGI by:

      1. Making 2025 HSA contributions (before the April 2026 tax deadline).

      2. Making 2025 deductible IRA contributions, if you’re eligible.

    Plan for 2026 income: If your 2026 income is likely to approach any phaseout thresholds (such as the $300,000 limit for tips/overtime or the $500,000 limit for the elevated SALT cap), consider strategies that help keep it within the qualifying range.

      3. Postponing the sale of highly appreciated stock to avoid realizing large capital gains in 2026.

      4. Delaying the exercise of nonqualified stock options if doing so would push you over a phaseout threshold.

      5. Maximizing 401(k) and health savings account contributions to reduce your 2026 MAGI.

      6. Holding off on large Roth conversions if they would increase your income above key limits.

    Don’t let the technical limitations and phaseouts catch you by surprise. With a little smart planning, you can lock in significant tax savings.

    _____

    This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-finance.

    Sheryl Rowling, CPA, is an editorial director, financial adviser for Morningstar.

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  • CAROL ROTH: Trump is right to worry about interest rates — but there’s a price to pay

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    NEWYou can now listen to Fox News articles!

    This administration was handed a fiscal mess, and with that a difficult path. Our debt/GDP is in the neighborhood of 120%, the level of an emerging market in crisis, held together by the U.S. dollar still being a major reserve currency and trade currency, as well as the importance and relative stability of our economy and financial markets.

    Our government continues to run massive deficits — the type you might see during a recession or war, not during a time of GDP expansion. And we are now in a place where interest expense on our national debt exceeds our spending on defense. As historian Niall Ferguson’s eponymous Ferguson’s Law says, “any great power that spends more on debt servicing than on defense risks ceasing to be a great power.”

    Given that higher interest rates beget higher debt servicing costs, and that we have an increasing amount of debt to finance, as well as trillions of dollars in debt to refinance this year, President Donald Trump is right to be concerned about interest rates.

    But there is no free lunch.

    LEAVITT ACCUSES SEN TILLIS OF HOLDING US ECONOMY ‘HOSTAGE’ OVER FED NOMINATION DISPUTE

    Kevin Warsh, former governor of the U.S. Federal Reserve, during the International Monetary Fund and World Bank Spring meetings at the IMF headquarters in Washington, D.C. on Friday, April 25, 2025. (Tierney L. Cross/Bloomberg via Getty Images)

    While the Fed has lowered its target interest rates, that more directly relates to interest rates at the short end of the yield curve (that is, short-dated Treasury securities). The market controls the long end of the curve (that is, longer-dated Treasury securities, like the 10-, 20- and 30-year maturities). And we have seen that those yields stay stubbornly elevated.

    Ultimately, there will likely need to be some form of yield curve control (measures that bring and hold down the longer-term bond yields). If we continue to see our interest expenses rise, that will drive a larger deficit. That means more debt financing, which will drive up yields, make interest again more expensive and create a debt spiral until the U.S. and global bond markets are thrown into turmoil.

    But, as we have seen with Fed meddling and government overspending, there is a cost to Fed intervention. The price paid will likely continue to inflate assets (on a nominal basis). While we need this because the value of stocks and housing decreasing over a period of time would likely directly and indirectly lead to a decrease in government receipts (aka tax revenue), it has the same effect on increasing deficits and exploding the cost of debt. This again means that some action will be taken.

    GOP SENATOR VOWS TO BLOCK TRUMP’S FED CHAIR PICK UNLESS POWELL PROBE IS DROPPED

    This is also why the positioning of Fed Chair appointee Kevin Warsh as a hawk (one who prefers tighter Fed policy) vs. a dove (one who prefers looser monetary policy) doesn’t really matter. Our fiscal situation and basic math will force him and the Fed to intervene in markets and lower interest rates one way or another.

    The price paid for holding our fiscal house together will likely be inflation. This will continue to erode the purchasing power of the U.S. dollar and drive a bigger wedge between the wealthy and the middle class in America.

    CLICK HERE FOR MORE FOX NEWS OPINION

    But intervention is only a temporary solution. It buys time, but it doesn’t solve the problem.

    Unless government spending is reduced, not only through lowering interest expense, but across all categories, or growth is so massive that in either scenario the deficit is eliminated, the core problem doesn’t go away. It just gets held back for a short period of time and then we will be in the same situation again.

    CLICK HERE TO DOWNLOAD THE FOX NEWS APP

    Our government continues to run massive deficits — the type you might see during a recession or war, not during a time of GDP expansion. 

    And, if you are familiar with Congress, there doesn’t seem to be any political will from either of the major political parties to spend within an actual budget.

    So yes, interest rates are a problem, as is government spending. Warsh will be forced to help, whether he likes it or not, and we will all pay a price.

    CLICK HERE TO READ MORE FROM CAROL ROTH

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  • As electricity costs rise, everyone wants data centers to pick up their tab. But how?

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    HARRISBURG, Pa. — As outrage spreads over energy-hungry data centers, politicians from President Donald Trump to local lawmakers have found rare bipartisan agreement over insisting that tech companies — and not regular people — must foot the bill for the exorbitant amount of electricity required for artificial intelligence.

    But that might be where the agreement ends.

    The price of powering data centers has become deeply intertwined with concerns over the cost of living, a dominant issue in the upcoming midterm elections that will determine control of Congress and governors’ offices.

    Some efforts to address the challenge may be coming too late, with energy costs on the rise. And even though tech giants are pledging to pay their “fair share,” there’s little consensus on what that means.

    “‘Fair share’ is a pretty squishy term, and so it’s something that the industry likes to say because ‘fair’ can mean different things to different people,” said Ari Peskoe, who directs the Electricity Law Initiative at Harvard University.

    It’s a shift from last year, when states worked to woo massive data center projects and Trump directed his administration to do everything it could to get them electricity. Now there’s a backlash as towns fight data center projects and some utilities’ electricity bills have risen quickly.

    Anger over the issue has already had electoral consequences, with Democrats ousting two Republicans from Georgia’s utility regulatory commission in November.

    “Voters are already connecting the experience of these facilities with their electricity costs and they’re going to increasingly want to know how government is going to navigate that,” said Christopher Borick, a pollster and director of the Muhlenberg College Institute of Public Opinion.

    Data centers are sprouting across the U.S., as tech giants scramble to meet worldwide demand for chatbots and other generative AI products that require large amounts of computing power to train and operate.

    The buildings look like giant warehouses, some dwarfing the footprints of factories and stadiums. Some need more power than a small city, more than any utility has ever supplied to a single user, setting off a race to build more power plants.

    The demand for electricity can have a ripple effect that raises prices for everyone else. For example, if utilities build more power plants or transmission lines to serve them, the cost can be spread across all ratepayers.

    Concerns have dovetailed with broader questions about the cost of living, as well as fears about the powerful influence of tech companies and the impact of artificial intelligence.

    Trump continues to embrace artificial intelligence as a top economic and national security priority, although he seemed to acknowledge the backlash last month by posting on social media that data centers “must ‘pay their own way.’”

    At other times, he has brushed concerns aside, declaring that tech giants are building their own power plants, and Energy Secretary Chris Wright contends that data centers don’t inflate electricity bills — disputing what consumer advocates and independent analysts say.

    Some states and utilities have started to identify ways to get data centers to pay for their costs.

    They’ve required tech companies to buy electricity in long-term contracts, pay for the power plants and transmission upgrades they need and make big down payments in case they go belly-up or decide later they don’t need as much electricity.

    But it might be more complicated than that. Those rules can’t fix the short-term problem of ravenous demand for electricity that is outpacing the speed of power plant construction, analysts say.

    “What do you do when Big Tech, because of the very profitable nature of these data centers, can simply outbid grandma for power in the short run?” Abe Silverman, a former utility regulatory lawyer and an energy researcher at Johns Hopkins University. “That is, I think, going to be the real challenge.”

    Some consumer advocates say tech companies’ fair share should also include the rising cost of electricity, grid equipment or natural gas that’s driven by their demand.

    In Oregon, which passed a law to protect smaller ratepayers from data centers’ power costs, a consumer advocacy group is jousting with the state’s largest utility, Portland General Electric, over its plan on how to do that.

    Meanwhile, consumer advocates in various states — including Indiana, Georgia and Missouri — are warning that utilities could foist the cost of data center-driven buildouts onto regular ratepayers there.

    Utilities have pledged to ensure electric rates are fair. But in some places it may be too late.

    For instance, in the mid-Atlantic grid territory from New Jersey to Illinois, consumer advocates and analysts have pegged billions of dollars in rate increases hitting the bills of regular Americans on data center demand.

    Legislation, meanwhile, is flooding into Congress and statehouses to regulate data centers.

    Democrats’ bills in Congress await Republican cosponsors, while lawmakers in a number of states are floating moratoriums on new data centers, drafting rules for regulators to shield regular ratepayers and targeting data center tax breaks and utility profits.

    Governors — including some who worked to recruit data centers to their states — are increasingly talking tough.

    Arizona Gov. Katie Hobbs, a Democrat running for reelection this year, wants to impose a penny-a-gallon water fee on data centers and get rid of the sales tax exemption there that most states offer data centers. She called it a $38 million “corporate handout.”

    “It’s time we make the booming data center industry work for the people of our state, rather than the other way around,” she said in her state-of-the-state address.

    Energy costs are projected to keep rising in 2026.

    Republicans in Washington are pointing the finger at liberal state energy policies that favor renewable energy, suggesting they have driven up transmission costs and frayed supply by blocking fossil fuels.

    “Americans are not paying higher prices because of data centers. There’s a perception there, and I get the perception, but it’s not actually true,” said Wright, Trump’s energy secretary, at a news conference earlier this month.

    The struggle to assign blame was on display last week at a four-hour U.S. House subcommittee hearing with members of the Federal Energy Regulatory Commission.

    Republicans encouraged FERC members to speed up natural gas pipeline construction while Democrats defended renewable energy and urged FERC to limit utility profits and protect residential ratepayers from data center costs.

    FERC’s chair, Laura Swett, told Rep. Greg Landsman, D-Ohio, that she believes data center operators are willing to cover their costs and understand that it’s important to have community support.

    “That’s not been our experience,” Landsman responded, saying projects in his district are getting tax breaks, sidestepping community opposition and costing people money. “Ultimately, I think we have to get to a place where they pay everything.”

    ___

    Follow Marc Levy on X at: https://x.com/timelywriter

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  • A privacy breach at the IRS: Taxpayer data wrongly shared with DHS, court filing says

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    WASHINGTON — The IRS erroneously shared the taxpayer information of thousands of people with the Department of Homeland Security, as part of the agencies’ controversial agreement to share information on immigrants for the purpose of identifying and deporting people illegally in the U.S, according to a new court filing.

    The revelation stems from a data-sharing agreement signed last April by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, which allows U.S. Immigration and Customs Enforcement to submit names and addresses of immigrants inside the U.S. illegally to the IRS for cross-verification against tax records.

    A declaration filed Wednesday by IRS Chief Risk and Control Officer Dottie Romo stated that the IRS was only able to verify roughly 47,000 of the 1.28 million names ICE requested.

    For less than 5% of those individuals, the IRS gave ICE additional address information, potentially violating privacy rules created to protect taxpayer data.

    Romo added that Treasury notified DHS in January of the error and requested DHS’ assistance in “promptly taking steps to remediate the matter consistent with federal law,” which includes “appropriate disposal of any data provided to ICE by IRS based on incomplete or insufficient address information.”

    The IRS-DHS agreement set off litigation between advocacy groups and the federal government last year.

    Public Citizen filed a lawsuit against the Treasury secretary, the Homeland Security secretary and their respective agencies on behalf of several immigrant rights groups shortly after the agreement was signed.

    Most recently, a Massachusetts federal court ordered the IRS to stop sharing residential addresses with ICE. And last November, a federal court blocked the IRS from sharing information with DHS, saying the IRS illegally disseminated the tax data of some migrants last summer.

    The news of the erroneous disclosure was initially reported by The Washington Post. A spokesperson from the IRS did not respond to an Associated Press request for comment.

    Advocates fear that the potential unlawful release of taxpayer records could be used to maliciously target Americans, violate their privacy and create other ramifications.

    Lisa Gilbert, co-president of Public Citizen said that “this breach of confidential information was part of the reason we filed our lawsuit in the first place. Sharing this private taxpayer data creates chaos and, as we’ve seen this past year, if federal agents use this private information to track down individuals, it can endanger lives.”

    Tom Bowman, policy counsel for the Center for Democracy & Technology said that “the improper sharing of taxpayer data is unsafe, unlawful, and subject to serious criminal penalties.”

    “Once taxpayer data is opened to immigration enforcement, mistakes are inevitable and the consequences fall on innocent people,” Bowman said. “The disclosure of thousands of confidential records unfortunately shows precisely why strict legal firewalls exist and have — until now — been treated as an important guardrail.”

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  • Unexpected money? Here’s what Canada taxes—and what it doesn’t – MoneySense

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    With an April 30 tax-filing deadline fast approaching, you might now be starting to wonder: How much am I going to owe from all that? The answer, tax specialists say, is probably nothing.

    Inheritance and windfall are two examples of money streams that people in Canada typically don’t pay tax on. Experts say it’s important to raise awareness of those and other common tax-free income sources, especially given how difficult it can be to navigate the ins and outs of the system during the thick of tax-filing season.

    What counts as taxable income—and what doesn’t

    H&R Block Canada tax expert Yannick Lemay said those exemptions can add up to significant savings. “With taxes, there’s a lot of nuances,” he said. “We have to be careful to know exactly the nature of the amounts we have received and how it has to be reported on your tax return because there are severe penalties for not declaring all your income.”

    Lemay said it’s important to consider how certain money was earned to determine whether it’s taxable. For instance, while lottery and gambling winnings for the average person in Canada aren’t usually taxed—something often misunderstood due to differing rules in the United States—that’s not the case for a professional poker player.

    “If, for example, you just casually go to the casino once in a while and you earn some money during the year, that is true that this money is tax-free,” he said. “But for someone else, maybe the casino winnings are the main source of income.”

    For the latter, someone who likely puts additional time and training into the craft, any winnings would be classified as business income, therefore making it taxable. “So, same source of money, same payer, but different treatment depending on who’s receiving it,” said Lemay.

    Income Tax Guide for Canadians

    Deadlines, tax tips and more

    The key is whether you’re attempting to bring in “recurring” income, said Gerry Vittoratos, tax specialist at UFile. That comes into play for those working in the gig economy or managing a side hustle—like running an Etsy store or delivering Uber Eats orders. “All of that is usually considered business income and the key is that it’s recurring,” he said. “You are regularly trying to earn income off of it.”

    How to deal with gifts, inheritances, and scholarships

    Lemay pointed to other money sources that aren’t taxable, such as gifts. No matter the size, gifted cash you receive isn’t taxable—however, any income generated from that sum of money would be.

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    Similarly, cash or property that’s inherited isn’t considered taxable income, however any income earned after you receive it, like interest or rental income, is taxable.

    Other tax-free income sources could include child support payments, most life insurance payouts, and certain government payouts, such as the GST credit or Canada Child Benefit.

    Lemay cautioned that some non-taxable amounts still need to be reported even if no tax is actually paid on it, as it can affect eligibility for such credits and benefits.

    For young adults enrolled in academic programs, scholarships, and bursaries are a common source of money that may not be taxed. That’s the case for full-time students enrolled in the current, prior, or next year, said Vittoratos. However, part-time students need to report amounts above certain thresholds.

    “If you’re a full-time student … you don’t even declare it on the return. It’s income that you just pocket directly,” he said. “If, though, you’re a part-time studentand you weren’t a full-time student in one of those three years, you only get a $500 exemption. Anything above that will become taxable and you have to declare it on the return.”

    Reporting unusual income: when in doubt, declare it

    Other income sources that don’t usually get taxed include union strike pay meant to help cover living expenses, personal injury or wrongful death compensation, and workers’ compensation benefits.

    When in doubt, Vittoratos said it’s better to report income than to omit information and potentially suffer the consequences. However, he noted it’s possible to amend your tax return later on. “The biggest mistakes people make on their returns is omissions,” he said. “It’s always, ‘Oh look I found this receipt three months later’ and then I have to amend the return.”

    Vittoratos added it’s important to remember that although January to April is generally considered tax season, it should never be “just a four-month process” for filing. The more time you give yourself to plan before the filing deadline, the less likely you are to make such errors. “January to April is when you’re actually filing your return, but your tax return is the year that just passed,” he said.

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    The Canadian Press

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  • Preparing taxes for someone who died – MoneySense

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    Contacting the CRA

    You should contact the government as soon as possible. This includes steps like cancelling a provincial health card, driver’s license, and applying for Canada Pension Plan (CPP) death and survivor benefits. 

    From a tax perspective, you should contact the CRA by phone or by mail. If you call CRA Individual Tax Enquiries at 1-800-959-8281, you should make sure you have on hand the person’s:

    • Date of death
    • Social Insurance Number (SIN)
    • Mailing address
    • Last tax return or notice of assessment

    You should report their date of death and stop any ongoing benefits that may need to be repaid. 

    There are several other government agencies you should also notify.

    Executors and next of kin

    To formally represent someone who has died with CRA, you can do so as a legal representative or name an authorized representative. A legal representative is generally the executor of the deceased’s estate named in their will. In Québec, this representative is called a liquidator.

    If you want to have online access to the CRA account of the deceased, you have to register for CRA’s Represent a Client service. You can do so with your CRA user ID and password, or with the Interac sign-in service to select a sign-in partner using your online banking.

    On the welcome page, select Add Account → Representative Account → Register with Represent a Client → Register Yourself.

    Once registered, you can submit documents using the Submit Documents service in Represent a Client. You need to provide a copy of the death certificate and a copy of the will, grant of probate, or letters of administration listing you as executor.

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    If the deceased had no will, you can fill out and submit Form RC552, Register as Representative for a Deceased Person.

    If you would prefer the old-fashioned way, you can also mail or fax these documents to the CRA without registering for Represent a Client. You should send them to the tax centre that serviced the deceased based on their mailing address.

    Income Tax Guide for Canadians

    Deadlines, tax tips and more

    Once you are authorized as the legal representative, you can appoint an authorized representative, like an accountant or lawyer. You do this from your own Represent a Client portal by entering the social insurance number of the deceased to access their online tax account. 

    Under the Related Services Section, select Authorized Representative(s), Authorize a New Representative, and follow the instructions. You must provide the representative’s RepID, CRA Business Number, or GroupID to appoint them.

    Tax returns

    You must file a final tax return up to the date of death reporting income for that year. There is also a deemed disposition of assets at death that may trigger tax on registered accounts like registered retirement savings plan (RRSPs) or registered retirement income funds (RRIFs). 

    Capital assets like non-registered investments, cottages, and rental properties may also be subject to capital gains tax. 

    Assets in other countries are also relevant, as Canadian residents are taxed on their worldwide income. 

    Certain elections may be available to defer tax on death, most notably a spousal rollover that allows assets to pass tax deferred to a surviving spouse or common law partner. 

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    Jason Heath, CFP

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  • Kenya unveils tax breaks for EV parts and charging stations

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    NAIROBI, Kenya — Kenya plans to roll out new tax incentives to speed up adoption of electric vehicles, betting that lower costs for vehicle parts and charging stations will attract investors and accelerate a shift away from fossil fuels.

    Transport Cabinet Secretary Davis Chirchir said the measures are part of a newly launched National Electric Mobility Policy, which now aligns the transport sector with Kenya’s climate commitments.

    “Electric mobility is crucial to reducing greenhouse gas emissions, decreasing reliance on imported fossil fuels, and fostering economic growth through local manufacturing and job creation,” Chirchir said.

    Kenya has in recent years introduced targeted incentives, including a zero value added tax on electric buses, bicycles, motorcycles and lithium-ion batteries, and lower excise duties on selected EVs. The new incentives include exemptions for value-added taxes and excise duties beginning in July. The stamp tax for charging stations will be reduced in 2027.

    The government has a target for 3,000 EVs for its ministries by the end of next year.

    Kenya has committed to cutting its greenhouse gas emissions by 32% by 2030 under the Paris Agreement treaty on climate change, with electric mobility identified as vital since transport is a major contributor to carbon emissions.

    The market is growing quickly, with the number of registered EVs rising to 24,754 in 2025 from 796 in 2022, largely driven by increased use of electric motorcycles, buses and fleet vehicles in urban areas.

    Sales of electric vehicles, including motorcycles, buses and private cars, are forecast to match those of gas and diesel-fueled vehicles by 2042, marking a structural shift in Kenya’s transport system.

    “We have now laid the foundation for a cleaner, more efficient, and more sustainable transport system that fully aligns with our climate commitments,” said Mohammed Daghar, principal secretary for transport. “With transport a major contributor to emissions, accelerating electric mobility is essential to achieving our target.”

    Electric mobility policies in most African countries are still evolving, with interest growing in use of electrics for public and private transport. Rwanda and Egypt have introduced a mix of fiscal and non-fiscal incentives to encourage use of EVs. Companies involved in EV manufacturing and assembly also benefit from corporate income tax relief and tax holidays.

    Still, for many countries the focus is on electric buses and two-wheelers. Policies include tax exemptions on EV imports and investments in charging infrastructure, and pilot projects for electric public transport.

    The transition carries risks. Kenya relies heavily on fuel taxes to fund road maintenance and other transport-related services. The policy estimates that as electrics displace gas and diesel engines, there will be a $693 million shortfall in fuel tax collections by 2043, up from a $16.9 million gap in 2025.

    Chirchir said the government is studying alternatives, including road-use charges and possible electricity-based levies linked to charging stations to offset the decline.

    ___

    Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

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  • Moving abroad? Think about the tax consequences – MoneySense

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    Changing your tax residency

    Canadian residents must report their “world income” in Canadian funds. When they become non-residents, they must file a final tax return as of the date of emigration to report income for the period of residency in Canada and, in some cases, pay a departure tax.

    Tax form filing requirements

    To begin, if the fair market value (FMV) of all property owned as of the date of emigration is more than $25,000, you’ll need to fill out and submit form T1161 List of Property of an Emigrant to Canada. This document must be attached to your T1 return. In fact, even if you don’t file a T1, failure to file this form by your tax filing due date will attract penalties.  

    To calculate a capital gain or loss on your deemed disposition, complete form T1243, Deemed Disposition of Property by an Emigrant of Canada and attach it to your T1 return. Some exceptions apply in both these cases, discussed below. 

    Should you owe money upon departure, but can’t pay because you haven’t sold your property or don’t want to, there is another important form: T1244, Election, under Subsection 220(4.5) of the Income Tax Act, to Defer the Payment of Tax on Income Relating to the Deemed Disposition of Property. Expect to post security in these cases if the capital gain exceeds $100,000.

    Exceptions to reporting requirements

    You don’t have to report the following assets when you leave Canada:

    Note that in the case of your Canadian pensions, non-residents are subject to a 25% withholding tax on the income paid, which is withheld at source by the pension fund. Non-residents can apply to reduce the withholding tax every five years, using form NR5. There may be tax treaty variations, but this would normally be a final tax owed to Canada with no further tax filing obligations on this income source.  

    Note that filing a tax return annually is a prerequisite to receive Old Age Security (OAS) when living abroad. Recipients must meet two other criteria. They must have:

    • Been a Canadian citizen or a legal resident of Canada on the day before they left Canada
    • Resided in Canada for at least 20 years since the age of 18

    Income Tax Guide for Canadians

    Deadlines, tax tips and more

    If you hold the following taxable properties when you leave Canada, you won’t need to report them before you leave. The future disposition of these “taxable Canadian properties” will require filing when these assets are actually disposed of:

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    • Canadian real or immovable property, Canadian resource property, and timber resource property 
    • Canadian business property (including inventory) if the business is carried on through a permanent establishment in Canada

    You can elect to report the FMV of these properties on departure by filing form T2061. This is known as an Election By An Emigrant To Report Deemed Dispositions Of Property And Any Resulting Capital Gain Or Loss.  

    That leaves the non-registered financial assets in investment accounts on your balance sheet to consider. They must be reported on the final return at their FMV, so choose your departure date carefully. Remember, you won’t need to file your T1 return until April 30 of the year after you leave.

    Even if you don’t have investments or real estate or business assets to report, you may not be off the hook: personal-use property with a fair market value of more than $10,000 must be reported on exit. That includes cars, boats, jewelry, antiques, collections, and family heirlooms if together these items are worth more than $10,000 in value.  

    Different rules for immigrants

    The rules are different rules for immigrants who now wish to move on. It is not necessary to pay departure tax on property owned when the person last became a resident of Canada (or property inherited afterward) if residency in Canada was 60 months or less during the 10-year period before emigration. This rule doesn’t apply, however, if the person is a trust, and the property is not “taxable Canadian property.” 

    Penalties for failure to file forms

    You’ll be subject to a penalty if you miss filing a final T1 return. Form T1161—your asset list—attracts its own penalties, too. Whether you file a T1 or not, the T1161 must be filed on or before your filing due date. The penalty for failing to file is $25 for each day it’s late, with a minimum of $100 and a maximum penalty of $2,500. Interest on the balance due and penalties is extra. 

    What about provincial taxes?  

    Remember, the Canadian tax filing system is based on residency, not citizenship. That means you report all your worldwide income in Canadian funds on your Canadian tax return. Your provincial share is normally based on where you lived on December 31 of the tax year. But this also changes to your date of emigration when you leave the country, for the purpose of determining provincial tax residency.  

    Coming back to live in Canada

    If you ultimately change your mind about emigrating or a foreign job opportunity runs its course, it is possible to unwind your departure tax when you become a resident of Canada again, as long as you still own the property you previously reported at FMV when you left Canada. The Canada Revenue Agency (CRA) notes that if you make this election for taxable Canadian property previously reported, you can reduce the gain up to the amount of the gain that you reported.

    For other properties, reduce the amount of the proceeds of disposition that you reported on your tax return by the least of the amount of the gain reported on your final T1 on departure, the FMV of the property when you returned, or any other amount up to the lesser of those two amounts. At this point your tax situation has become complex, so you’ll probably need professional help to get it right. Dealing with the CRA on these compliance issues can be very time-consuming. 

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    Evelyn Jacks, RWM, MFA, MFA-P, FDFS

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