TaxPolicy

🚨U.S. lawmakers are debating a major tax break for private credit investors, originally included in Trump’s spending bill, passed by the House. The proposal aims to reduce taxes on dividends earned via Business Development Companies (BDCs) — a move that could cost the government $10.7 billion over nine years, according to the Joint Committee on Taxation.
🔻 Senate Draft Drops the Provision

The tax cut was stripped from the Senate’s version of the bill amid rising concerns about its cost and fairness. Opponents, including Senator Elizabeth Warren, argue it benefits wealthy investors at the expense of programs like Medicaid and SNAP.

“Private credit companies don’t need a tax break — working people do.” — Sen. Warren
📉 Criticism Mounts Over Spending Priorities

The Congressional Budget Office (CBO) warns the bill could add $2.4 trillion to the national debt by 2034, with limited economic benefit. Critics say the cuts target low-income support while favoring high earners.

📈 Industry Pushback and Support

Supporters argue the tax break would level the playing field for BDCs, comparing them to REITs (Real Estate Investment Trusts), which won similar treatment in 2017. BDCs attracted $44B in investment last year, a 70% increase from 2023, and proponents believe tax relief could fuel further capital inflow.

Despite opposition, advocates are working on a simplified proposal to reduce cost and gain broader support.

🧾 Key Takeaways:
Proposed tax cuts for BDCs could cost $10.7B over 9 yearsCritics say it favors the wealthy and risks cutting public servicesSupporters argue it promotes investment and fair tax treatmentUncertainty remains as the bill heads for final negotiations
#TaxPolicy #USNationalDebt #CryptoClause

As part of a broad initiative to reduce the federal workforce, the IRS is considering laying off up to 50% of its employees. These measures include mass layoffs, incentive buyouts, and early retirements, potentially affecting up to 45,000 workers. This decision is a key component of President Donald Trump’s administration, spearheaded by Elon Musk, aiming to drastically cut government spending.
First Wave of Layoffs Has Already Begun
At the start of Trump’s presidency, the IRS employed nearly 100,000 people. Since February 20, the agency has already laid off approximately 7,000 employees, primarily those still in their probationary period without job protections. According to the New York Times, the remaining employees are being offered resignation packages.
Tax expert Mike Sylvester warned that cutting the workforce in half could severely disrupt the agency’s operations, causing delays in tax processing and refunds. “Americans could be waiting much longer for tax returns, and overall tax services may deteriorate,” Sylvester noted.
When Will the Next Layoffs Happen?
The IRS has yet to specify a clear timeline for additional layoffs. However, reports suggest that some dismissals have been postponed until the spring, after the peak tax season ends. The agency is currently overwhelmed with processing tax returns, meaning some critical positions remain temporarily unaffected.
Nevertheless, the administration remains firm in its goal to reduce the IRS workforce to just 45,000 employees. This drastic reduction could lead to longer wait times for tax refunds, fewer audits of large corporations, and an overall weaker enforcement of tax laws.

IRS Leadership Faces Pressure Amid Workforce Cuts
According to sources, IRS leadership is facing intense pressure as a result of the mass layoffs. Two key senior officials have already resigned, and acting IRS Commissioner Melanie Krause reportedly placed the chief human resources officer on administrative leave this week.
Meanwhile, the Department of Government Efficiency (DOGE), led by Gavin Kliger and Sam Corcos, has reportedly been actively reviewing IRS operations as part of Musk’s broader cost-cutting initiative. The organization is pushing for access to IRS databases containing detailed contractor information.
“Cutting the IRS in half at a time when even 90,000 employees aren’t enough due to outdated technology is extremely risky,” Sylvester warned.
How Will Layoffs Impact IRS Audits and Tax Enforcement?
According to experts, mass layoffs could significantly weaken the IRS’s ability to conduct audits and enforce tax laws. Vanessa Williamson, a senior fellow at the Urban-Brookings Tax Policy Center, stated that reducing IRS staff could effectively end efforts to monitor tax evasion among the ultra-wealthy.
Currently, the IRS employs around 90,000 people across the United States, with over 56% of its workforce being minorities and 65% being women. Labor unions and former IRS officials have strongly opposed the layoffs, warning that they could severely impact the agency’s ability to function.
“With fewer employees, there will be fewer tax audits on wealthy Americans and corporations, potentially leading to a significant drop in tax revenue,” former IRS commissioners warned in a joint statement.
IRS Employees May Be Transferred to Homeland Security
In an unexpected move, some IRS employees could be transferred to the Department of Homeland Security (DHS) to assist with immigration enforcement. In February, DHS Secretary Kristi Noem formally requested that IRS reallocate staff to help with border security and other enforcement tasks.
However, sources suggest that employees involved in processing 2025 tax returns have been restricted from accepting Musk’s buyout offers until after the April tax filing deadline.
What’s Next for the IRS?
With continued pressure to shrink the federal government, the IRS is expected to undergo further layoffs and restructuring. Any additional changes could have a significant impact on the speed and efficiency of tax collection in the United States.

#IRS , #CryptoNewss ,#TaxPolicy , #ElonMusk , #DonaldTrump

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Republicans in the U.S. Congress are pushing a new tax package that has sparked concerns among companies and investors alike. At the heart of the debate is Section 899, a provision that could significantly increase taxes for foreign corporations operating in the U.S. — up to 20%. And that’s exactly why both Main Street and Wall Street are pushing back.
🔹 Who’s affected? Almost everyone — from European corporations to investment funds from Canada, Australia, and Japan. And the worries are real: the new tax could apply to profits from rents, real estate sales, and securities investments.
🔹 Why the increase? The U.S. is responding to foreign digital taxes it sees as unfair. But the side effects might be broader than anticipated.

💼 Nearly 200 Companies at Risk
Representatives from companies like Shell, Toyota, SAP, and LVMH are already sounding the alarm — some of them are scheduled to meet with members of Congress this week to challenge Section 899. They warn that up to 8.4 million U.S. jobs could be at risk.
David McCarthy from the CRE Finance Council warns the new tax framework could decrease the value of commercial real estate, as funding for purchases could dry up.
Beth Zorc, CEO of the Institute of International Bankers, cautions: “Section 899 could suppress direct foreign investment, destabilize the financial market, and jeopardize jobs across the U.S.”

📉 Investments on Hold, Wall Street Shaken
The proposal could affect nearly $40 trillion in U.S. assets held by foreign investors, including treasuries, corporate loans, and deposits. Dividends and interest could be newly taxed at 5% annually over four years.
Some legal experts say investors are already pausing planned U.S. investments until more clarity emerges. Even sovereign wealth funds, which were previously exempt, could be affected.

📊 Billions in New Revenue, Trillions in Debt
Section 899 could generate $116 billion in tax revenue over the next decade. But according to the Congressional Budget Office, the entire budget proposal would increase the U.S. deficit by $2.4 trillion by 2034.
While Republicans see the law as a way to punish unfair foreign tax policies, business leaders warn the consequences for the U.S. economy could be severe and long-lasting.

#WallStreet , #GlobalMarkets , #TaxPolicy , #USPolitics , #tax

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Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“