Couple of days before the act passed the senate. One was a proposal to raise taxes on interests, of compensation earned by certain folks in the financial industry was removed from that legislation on request of the senator sinema. There are a focus on smaller changes to a proposed book tax that would be applied to large corporations as well as some other large changes related to the spending side and tax changes. This legislation would raise revenue and reduce the deficit by 300 billion over the next 10 years but it would come at the expense of lower growth because of the tax hike. Hike. Every day, people to know about the aftertax income due to the prior Health Care Subsidies and Energy Credits in the bill over the next 10 years but we do find in the long run because a lot of that expires you have a lower income tax income because of those higher taxes as well. Host how does this work but it would impact american taxpayers . Overall the higher taxes are the corporations and high income individuals. We have to remember who actually pays the tax directly is not necessarily the person who bears the burden of the tax. What we find is that workers and people who own corporate stocks in their retirement accounts are going to bear part of the burden of this Corporate Tax change through lower wages and lower values in their retirement and investment accounts. Most of this will be borne by higher income individuals. It is still a tradeoff that needs to be highlighted. Host who are those people the that have Retirement Funds that this would impact them substantially enough . Guest about 40 of americans are more that shown retirement accounts. They are going to see some that will be affected. Aftertax income in the long run, its a bit higher for households at the top because they do have more stock overall. I think the central part of it, what ends up happening its been Health Care Subsidies, the drug provisions but some of the stuff does expire and that does make a difference. There needs to be a new conversation especially in 2025 and 2032 when a lot of this is expiring about how to expand that. Or if that becomes permanent. We will have to go back to the tax guide and think about the tradeoffs there. Host what are the provisions you are talking about . Increase but as 1 tax on buybacks. Does this impact, is there a way for people who do stuff to pass this along . Or is is going to truly put those who do, those executives who do stock buybacks . Guest the 1 tax on the value of stock buyback every year and that is going to be remitted from the firms themselves. Its going to have a similar effect by paying additional tax on a buyback it makes a decision not to engage in big buybacks also to invest or remit returns to shareholders. Most of that, many of which are higher income overall. I think the big question there is novel. It has not been tried before it there are already questions about how domestic firms might be hit versus foreign firms they may not be affected by this. There are questions that need to be ironed out. Host how much revenue does this bring in . Guest so it rings back about 80 billion, that about washes out with the other changes in the legislation. Overall the reduction in the deficit will be about the same coming out of the senate then it was when it was originally pitched. Host which is what . Guest about 300 billion. A big part of that includes higher enforcement. That includes 200 billion in additional revenue. The official scorekeeper expects to bring it because enforcement. 100 billion dollars from the text changes. Host lets talk about other things you have mentioned. The expanded Health Insurance premium tax credit. Explain a little more, how does this work . Guest as part of the rescue plan act that was past the beginning of 2021, there was an extension through an expansion of Health Care Subsidies that were initially set up. The challenge was at about 400 of the poverty line which is still very much working class americans. Earning more money means a short drop off in subsidies. So part of that legislation, there was expansion of the benefits both in that income range proclaimed subsidies on healthcare exchanges to more Health Insurance. Whats happening now is it has been scheduled to expire or has expired and they are looking to continue to provide those benefits and this legislation is through the end of 2025. Without that change it would expire the end of this year, and most people would see an increase in their premium because that benefit would no longer be available. That raises the question of what are we going to do in 2025 . Are we going to continue to provide it . It talks about the ballpark of 25 million a year. They might have to reconsider at that point with which lines up with other tax tinges. Host lets ask our view is here to join and in the conversation. Republican, democrats, independents the phone lines are on your screen begin dialing in. Garrett watson is here to take your questions on this Inflation Reduction Act. Again on the energy, tax credits for buying electric and Hydrogen Vehicles and making Energy Efficient home improvements. Tell us the impact of it. Guest the Inflation Reduction Act provides a little over 50 billion in tax credits for renewable and green energy of production of the energy and investing in more Energy InvestedEnergy Efficient homes and cars. As well as everyday consumers. They want to follow wellknown 7500 dollars for cars that are electric or pop plugin hybrid that is going to be a big one. The other thing i did was a lot of these credits expire every year. There is a lot of uncertainty for consumers and firms trying to invest. Most of them extend through 2031 or 2032. The there is stability there. After 20 to five a lot of this is mark Technology Neutral design which means incentivizing any given particular Technology Like solar or wind. You want to incentivize production. So, thats going to be a shift there. The tradeoff is there are not a lot of permanent there are concerns. We will have to watch and see how that is picked up and what the impact is. Host tax credits for companies that build new sources of emission free electricity. We are talking about wind turbines, solar panels, expand tax credits for coal and tech plants that use carbon capture. All of that expires after a while . Guest a lot of it does there are two credits and investment critics that are longerterm that are targets for reducing emissions. Those will continue until we see reductions in emissions. All the other credits individuals might be relying on expire in 20 32, 2033. In the next 10 years the responsibility that didnt expect exist prior. Sometimes they apply retroactively. Host to our viewers at this is your chance to call in with your questions and comments about the tax provisions. Republicans 202 7488001. Democrats 202 7488000. And independents 202 7488002. You can also text with the question, include your first name, city and state. 202 7488003. Chris in san antonio, republican. Hi chris. Caller thank you for taking my call. I want to ask mr. Watson on the text, the revenue thats going to come in from the increased irs agents they get to squeeze people, is that going i watch the cspan over the weekend. Is that going to be auditing people over 400,000 . Or does that include auditing people under 400,000 . Guest thats a good question. The bill does try to see that the intention here is not the target the 400,000. This will not be aimed at those earnings less than 400,000 but that is pretty hard to track over time. I think there is a reason why they cant guarantee that it may not affect anyone part of that income threshold. A lot of tension will be at the top 1 who have profitable force of income, partnerships. There are a lot of text questions there. The last couple of years, there are still opportunities to improve Customer Service and Taxpayer Services as well as just more transparency about what is going on in the irs. Most of them have, the artists not a lot of ages it cant focus on the enforcement side. Or it wont work. Host i want our viewers to listen to the Top Democrats senator braun white. He was on the floor defending more resources for the irs. Heres what he had to say. [video clip] our colleagues on the other sides say somehow this is going to target the working people. Another member of the committee, thats just not going to happen. The reason its not, as my colleagues on the finance committee know so well, working people are not the problem here. They pay taxes with every single paycheck. Its right there on their paycheck. Everybody knows what taxes they pay and should they be engaged in any questionable activity showing up on these forms. They are not the problem. But as we have been told again and again by independent experts , democrats, republicans and independents. We do have a problem with big, wealthy tax cheats. They dont pay taxes with every single paycheck like firefighters and nurses. After republican budget cuts we are now in a very difficult position to go after these wealthy tax cheats who rip off the American People for billions of dollars every year. The current commissioner who joins many democratic commissioners the current one is a republican appointee. Estimated the text owed not collected could be as much as 1 trillion per year. We believe that the agency ought to have the resources to go after sophisticated, lawbreaking check tax cheats at the top. Host your reaction to what he had to say on the senate floor . Guest there was a good point. When we look at the tax cap, which is the term for basically the difference between taxes imposed and owed. The amount they actually pay. Most is not from the average wage earner. A lot of them do their taxes and figure out what is going on there for the most part. Based on the differences between taxes paid and taxes owed comes from the top when you are looking at partnerships, Investment Income, because reported to the irs and taxpayers subtract. It gets trickier to deal with but i think there is a point there. I want to add there are very real tax concerns particularly for those who end up planning the earned income tax credit there are complications that in most of these folks are not trying to evade taxes or do anything incorrectly. It is just very complicated. That can make it challenging for them to plan the credits correctly and what we need their support from the irs as well as the implication of the credits so the dont end up in an audit or investigation that is unwarranted. But that is an important part of the story as well. It is paired well with enforcement. As i mentioned earlier someone said it doesnt make sense. Its a real effort to modernize the irs, Customer Service of irs, everybody is focused on the time on hold to get a hold of someone. Its the same questions taxpayers may have before they ran into tax problems. I think that is very complement three. It could be bipartisan depending on how moving forward after this bill. Host james in florida, democratic color. Good morning to you, go ahead. Caller good morning. Do you hear me . Host we can. Go ahead. Caller my question is, there was a center senator who mentioned the irs hired 87,000. Let me finish what im going to say, 87,000 agents who go after the cheaters. And im thinking, wait a minute. There is only 83,000 agents that work for the irs right now. Is it going to be 87,000 additional employees . Or is it going to be 4000 new agents . Can you clarify that, please . Guest thats a good question. The projection is the irs would hire up to 87,000 fulltime employees though not all of them will be auditors. A lot of them would go to Customer Service as i mentioned. A portion of them, some of them would be going to auditing. Various other parts of the agency that work with taxpayers and so that is sort of the all in number. But it is important to plan a very real increase to the irs it will increase overall funding given the next 10 years. The other thing to watch for is youre going to see this uptick in resources and faculty irs but the funding is a onetime thing. 10, 15 years from now what is that going to mean for all those additional agents hired, for taxpayers who have additional resourcing is there going to be for the conversation about what should be the stable longterm funding . Advocates of this change say this is just getting it back to a baseline we had a decade or two prior. Host james now we got back to you. After you heard the answer, what is your reaction . Caller is it still, 50 increase in use at a different. My understanding that right . Guest the funding will be higher, 50 higher for the next 50 years not all of them will be auditors. Weatherford maine, independent. Caller good morning, thank you for taking my call. I just got to ask you the republicans tax credit that was a middleclass text credit during the trump administration, what happens to that . We were supposed to have tax returns period i have been sitting my tax return. Im in a lot of trouble for the last three years. What happened to that . What happened to that . You come up with all these facts. Let me ask [indiscernible] what are you smiling out . Host we will get an answer. Garrett watson, go ahead. Guest we work on nonpartisan policies to encourage americans. I think that is really the focus of our work. Thinking about the impact of the 2017 text on every american what we found was most americans would see a text that because of a combination of the lower tax rate, the higher standard duction while other changes that happened in the tax law. Two things to point out here one is text law doesnt expire in 2025 so folks will be in seeing differences in their taxes. We will have to see what to do about that when we get there. Things are still very complicated. People are not at a point where they can fill out a postcard despite that being a goal there is not a lot of art there is still a lot of work that needs to be done. Particularly in the economy or working it makes their tech situation pretty complicated. There is a lot of work to be done there. A lot of ideas floating around. That leads to pressure leading up to 2025. Host here is a text from a viewer. Do you believe removing the carried interest money made by people who invest other peoples money was the right thing to do . Guest thats a good question i think it is a subject for debate not just politically but also amongst text all. The big discussion here is to boil it down, what kind of income is this . Is this more like Investment Income or return from investment . As opposed to a lot of people know. You get along lower tax rate. Or it is more similar to working your everyday job. It is a form of laboring some. The argument on both sides about that, i can see both arguments. It seems like policymakers strived to force middle path. They say you have to hold onto that carried interest for a longer. Of time. Right now, its a few years spending it up to five years and potentially the inflation i think thats going to be topic. It should be a change in the holding. Or maybe the provisions have it right. The last i mentioned is is going to be debate on how it might affect the private equity and financial industry. I can look not as a its a big incentive to invest and in american start up. Thats important when we are trying to teach china and other figure powers. People are very responsive to all types of it. Overall, part of this legislation replaces the text hike elsewhere and offsets that. Overall it didnt make a big dent out of the revenue. Host in other text from joe in d. C. What tax proposals did not make it into the final bill . Mike, go ahead. Guest there were many proposals on both sides. Most of them didnt make it. Everything from higher Corporate Tax rate which is a strong part of the proposal. Its pretty complicated and white reaching to propose Capital Gains are treated in this country. I heard the big thing that will remain the corporate rate there is still a pretty large debate about where the rate should be. First we argue that we should keep that rate where it is or lower but others argue may be issued go up to 25 or 20 . That was part of this debate for a long time. There are also discussions about where it should stand. The top rate is 37 . Democrats opposed to is that up. Continues to be a conversation particularly the reeses change at the end and the last thing i want to mention is the session as well, the status of the 10,000 cap on the deduction for home and state local taxes. Democrats have been passionate and argued there needs to be a more generous tax there because it is hiring some folks. That is something we will have to watch and see if that comes back up. I think all of those are going to be an opportunity for discussion depending on where the hall hits over the next few years. Host minnesota, republican. Guest , anybody that thinks fit being taxed. If there is a loophole, they are following the law they are not cheating. If its not possible, its not possible. If anyone is foolish to think that if you do, if it increases their taxes is going to not be tied to their consumers. Secondly the idea that this 87,000 new agents plus the still bait irs just ordered 450,000 guns in and a 5 million rounds of me addition that doesnt select they are about to get into the Service Industry and why does the irs need these weapons . Then the fbi and Justice Department rating and expresident s home and have no criminal charges under the guise of some kind of documents. Host we are going to return to that subject later on. Garrett watson for focus on the text questions that you raised. Guest on the corporate tech site, i think the caller has a point. There needs to be a difference. Take advantage of what already exists and within the tax code many of which are tax incentives and text credits. Incentivize certain behavior, thats really important to plan out. A lot of this stuff is dr. Girl about an agreed on. Both were individuals and corporations. We need to know the difference between that and the evasion which is where and actually a lot harder to deal with because you are dealing with those who have not been a part of the situation. Its trying to circumvent a lot of the preferences in the code. I think that would be continued to talk about that. The irs agent site, i have to say it needs to be emphasized that in addition to auditors and to the penalty approach or folks trying to evade taxes its not an important part of it and during hey, if i have beaten if i speed in this intersection im going to get pulled over. If they are evading their taxes and not fulfilling responsibilities under the law, they are going to be scrutinized. That encourages voluntary compliance. We need to have an agency that states they are not going to be subject to disproportionate investigation or subject to penalties and that they are helped with that agency. The enforcement with Customer Service and with education think those are important parts of the conversation we can just be focused on the corporate side. Host lets hear from dan in massachusetts. Caller hello, thank you for having me on. I have a question so your guest supports west complicated tax systems, is that correct . Guest correct. Caller and i guess he also supports on, lets see. More simple tax code and do you support this bill . Guest as it is true, there are tradeoffs, right. Higher incomes for certain people in the long run but