Steep inflation prompts a higher rate hike. The Federal Reserve’s Open Market Committee increased short-term interest rates by 75 basis points. This is the Fed’s largest rate hike since 1994.
Sen. Romney modifies his proposed Family Security Act. His plan would provide a monthly cash benefit of up to $350 for each young child and $250 for each school-aged child. However, the full benefit would only be available to households with income of at least $10,000. Romney, who has two GOP cosponsors on his new plan, would fund his proposal by eliminating the State and Local Tax Deduction (SALT) and trimming the Earned Income Tax Credit.
Challenging crypto disclosure. A cryptocurrency group called Coin Center is suing to overturn the 2021 law that requires brokers to report transactions of $10,000 or more to the IRS. The group says the reporting requirement due to take effect in 2024 violates Fourth Amendment protections against unreasonable search and seizure. The suit, filed in federal court in Kentucky, argues the reporting rules will “impose a mass surveillance regime on ordinary Americans.”
More global minimum tax drama. Once Poland agreed to drop its objection to the European Union (EU) plan for a 15 percent minimum tax on corporations, the EU prepared to lock up the deal on Friday. But Politico reports that Hungary now has objected for reasons that are unclear. The agreement must be unanimous.
High Court upholds Washington State’s tax on financial institutions. The US Supreme Court refused to hear a challenge to the constitutionality of Washington State’s tax on financial institutions. It lets stand a Washington Supreme Court ruling that upholds the tax and rejects the argument that the law targeted out-of-state institutions. The state high court ruled the tax “applies equally to all financial institutions meeting the $1 billion income threshold, irrespective of whether they are based inside or outside of Washington.” The tax generates about $200 million every two years.
Puerto Rico’s governor suspends its gas tax. The 16-cent-per-gallon tax will be suspended for 45 days due to the global surge in petroleum prices. Gov. Pedro Pierluisi says he will deposit an extra $25 million into the commonwealth’s general fund to offset the loss in gas tax revenue.
The IRS raises the tax-deductible mileage rate. For the second half of 2022, the IRS will raise the deductible costs of operating a vehicle for business by 4 cents to 62.5 cents per mile. The IRS usually adjusts this rate annually but made the mid-year adjustment because of recent gas price increases.
McDonald’s settles its tax dispute with France. The firm agreed to pay about $1.3 billion in fines and taxes to France, which has been investigating the fast food giant since 2014. French officials alleged McDonald’s reduced its French tax bill by diverting fees paid by its franchises to units in lower-taxed countries.
European Union plans to crack down on tax planning advisers. Bloomberg Tax reports that the EU wants to define aggressive tax planning and place limits on advisers who recommend tax-minimizing structures. The EU could propose the rule this year. It would be designed to undercut non-EU tax advisers, including those that offer off-the-shelf tax avoidance structures in non-EU jurisdictions.
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