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As the Senate debates President Donald Trump’s giant tax bill, the One Big Beautiful Bill Act, which includes trillions of dollars in tax breaks, some smaller business owners are worried they might miss out on a popular deduction for state and local taxes (the SALT deduction), which is commonly referred to by its acronym. The debate over SALT was one of the sticking points that delayed passage of the bill in the House. The current version of the House Republican-sponsored tax bill would raise the federal deduction limit for state and local taxes (SALT) from $10,000 to $40,000, which would phase out when income hits $500,000. The bill would also increase the qualified business income (QBI) deduction, set to expire in 2025, from 20% to 23% starting in 2026, and make it permanent. The QBI deduction applies to so-called pass-through businesses, such as S corporations, partnerships, and sole proprietors like freelancers and contract workers. However, it would end a much used state-level SALT cap work-around for some of those pass-through business owners, according to CNBC. The SALT deduction was enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA). Lawmakers in high-tax states like New York, New Jersey, and California have long wanted to raise the cap, claiming that their states are paying more in federal taxes than they are getting back, leaving residents with a much larger bill. Before Trumps 2017 tax bill imposed a $10,000 ceiling, those states’ residents could write off their state and local taxes. However, the Senate could still modify the proposal as it debates the bill. There are concerns that allowing business owners to deduct up to $40,000 from their federal taxes means the government would collect less taxes, adding further to the nation’s deficit. On Wednesday, the Congressional Budget Office (CBO) estimated that the megabill would add $2.4 trillion to the deficit, and its tax cuts would decrease revenue by more than $3.6 trillion over the next decade or so, per The Hill. Senate majority leader John Thune of South Dakota, who told Politico he hopes to pass the megabill by the Republicans’ July 4 deadline, said the SALT cap might have to come down to raise revenue to cover the expenses of the president’s “big” (or as some say, “expensive”) tax bill. The House had initially raised the cap to $30,000 in the previous plan.
Category:
E-Commerce
Amazon plans to invest $10 billion toward building a campus in North Carolina to expand its cloud computing and artificial intelligence infrastructure, bringing a massive shot in the arm to a region where many textile and apparel jobs dried up a generation ago. Amazon said Wednesday that its investment in rural Richmond County should create at least 500 jobs and support thousands more through construction and data center supply chain providers, according to statements from the company and Gov. Josh Steins office. Stein called the investment one of the largest in state history. Data centers are already familiar to North Carolinas landscape, including those operated by Apple. This project could transform Richmond County, which is on the South Carolina border and has a population of about 42,000. The Richmond County site is expected to employ engineers, network and security specialists and other technical roles, the company said. Amazon said it would provide support for universities, community colleges and other workforce training programs to help people enter data center and broadband expansion fields. This investment will position North Carolina as a hub for cutting-edge technology, create hundreds of high-skilled jobs, and drive significant economic growth, Amazon chief global affairs and legal officer David Zapolsky said. We look forward to partnering with state and local leaders, local suppliers, and educational institutions to nurture the next generation of talent. Richmond County commissioners approved an incentives package for Amazon on Tuesday. The company could receive annual cash grants for 20 years equal to portions of the real estate property tax and the property tax for vehicles and equipment at each data center contingent on job creation and monetary investment thresholds, The Richmond Observer reported. This project will truly transform our community in ways that we cannot imagine, Richmond County Manager Bryan Land said at Tuesdays commissioners meeting. With the announcement comes large-scale upgrades to our water system, Rockinghams wastewater system and our fiber optic infrastructure throughout our county all of which will come at a cost to our Richmond County taxpayers of zero. Steins office, which called the project an innovation campus, said the data centers will contain servers, storage drives, networking equipment and other technology. Artificial intelligence is changing the way we work and innovate, and I am pleased that North Carolina will stay at the forefront of all thats ahead as we continue to attract top technology companies like Amazon, Stein said. The governor attended a public announcement about the investment on Wednesday at an investment in Hamlet. The company said it has invested $12 billon in North Carolina since 2010 and supports 24,000 full- and part-time jobs.
Category:
E-Commerce
A small government office with some 275 employees has found itself caught in the political crossfire as Congress debates President Donald Trumps one big, beautiful bill.” The Congressional Budget Office has projected that the legislation would increase federal deficits by about $2.4 trillion over 10 years. That’s a problem for a Republican Congress that has spent much of the past four years criticizing former President Joe Biden and Democrats for the nation’s rising debt levels. The White House and Republican leaders in Congress are taking issue with CBO’s findings. They say economic growth will be higher than the office is projecting, resulting in more revenue coming into government coffers. Meanwhile, Democrats are touting CBO’s findings as evidence of the bill’s failings. Here’s a look at the office at the center of Washington’s latest political tug-of-war. What is the CBO? Lawmakers established the Congressional Budget Office more than 50 years ago to provide objective, impartial analysis to support the budget process. The CBO is required to produce a cost estimate for nearly every bill approved by a House or Senate committee, and will weigh in earlier when asked to do so by lawmakers. It also produces a report each Congress on how to reduce the debt if lawmakers so choose, with each option including arguments for or against. Plus, it publishes detailed estimates when presidents make proposals that would affect mandatory spending, which includes programs such as Social Security and Medicare. Lawmakers created the office to help Congress play a stronger role in budget matters, providing them with an alternative to the Office of Management and Budget, which is part of a Republican or Democratic administration, depending upon the president in office. Is the CBO partisan? CBO hires analysts based on their expertise, not political affiliation. Staff is expected to maintain objectivity and avoid political influence. In evaluating potential employees, the CBO says that for most positions, it looks at whether that person would be perceived to be free from political bias. Like other federal employees, the CBO’s staff is also prohibited from making political contributions to members of Congress. The CBO’s director, Phillip Swagel, served in former Republican President George W. Bushs administration as an economic adviser and as an assistant secretary at the Treasury Department. Why is the CBO being attacked now? The stakes are incredibly high, with Republicans looking to pass their massive tax cut and immigration bill by early July. Outside groups, Democrats, and some Republicans are highlighting CBO’s analysis that the bill will increase federal deficits by about $2.4 trillion over 10 years and leave 10.9 million more people uninsured in 2034. Republicans spent much of Biden’s presidency focused on curbing federal deficits. They don’t want to be seen as contributing to the fiscal problem. GOP lawmakers say the CBO isn’t giving enough credit to the economic growth the bill will create, to the point where it would be deficit-neutral in the long run, if not better. “The CBO assumes long-term GDP growth of an anemic 1.8%, and that is absurd,” said White House press secretary Karoline Leavitt. The American economy is going to boom like never before after the One Big, Beautiful Bill is passed. Republicans began taking issue with the CBO even before Trump and the current Congress were sworn into office. CBO will always predict a dark future when Republicans propose tax reliefbut the reality is never so dire,” Rep. Jason Smith, the Republican chairman of the House Ways and Means Committee, said in a December news release. Recently, House Speaker Mike Johnson has been taking digs at the office. The CBO is notorious for getting things WRONG, he said in a Facebook post. What did CBO say about the tax cuts enacted in Trump’s first term? In April 2018, CBO said that tax receipts would total $27 trillion from fiscal years 2018 to 2024. Receipts came in about $1.5 trillion higher than the CBO projected. Republicans have seized on that discrepancy. But the numbers don’t tell the whole story. Some of the criticism of the CBO ignores the context of a global pandemic as the federal government rushed to prop the economy up with massive spending bills under both Trump and Biden. In a blog post last December, Swagel pointed out three reasons for the higher revenues: The primary reason was the burst of inflation that began in March 2021 as the country was recovering from COVID. That burst of inflation, he said, led to about $900 billion more in revenue. There was also an increase in economic activity in the later years of the period that added $700 billion. Also, new tariffs added about $250 billion, with other legislation partially offsetting those three factors. By Kevin Freking, Associated Press
Category:
E-Commerce
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