Accounting
Millionaire tax would generate about $400B in revenue
A Republican proposal to impose a tax hike on millionaires offers to generate about $400 billion over a decade, according to two new estimates provided to Bloomberg News, providing fresh revenue to partially offset the cost of the party’s multitrillion-dollar tax package.
The Budget Lab at Yale projects that taxing income over $1 million at a 40% rate would generate $420 billion over a decade. The Tax Foundation in its own preliminary analysis finds that the new bracket would raise $358 billion over the same 10-year period, according to Garrett Watson, the director of policy analysis for the think tank.
The two estimates from nonpartisan think tanks differ slightly because each group uses different assumptions about economic performance. But the figures suggest that the creation of a millionaire tax bracket could help President Donald Trump enact some of his campaign trail pledges, including eliminating taxes on tips, which is estimated to cost $118 billion over ten years.
Lawmakers are slated to return to Washington next week following a two-week recess, with their top priority crafting a package to renew Trump’s 2017 cuts for households and closely held businesses. They’re also discussing new priorities, including ending taxation on overtime pay and new tax breaks for seniors and car buyers. No taxes on overtime pay would cost at least $680 billion over 10 years, according to the Tax Foundation.
The Senate has deployed an accounting gimmick so that the $3.8 trillion cost of extending Trump’s first-term tax cuts counts as $0 for budgeting purposes. But Republicans have a strict $1.5 trillion revenue limit for any new reductions, putting pressure on them to scale back some of their ideas or find revenue offsets — such as the millionaire bracket — to pay for new tax breaks.
Trump has indicated
House Majority Leader Steve Scalise has pushed back, saying they oppose any rate increase. Iowa Senator Chuck Grassley told constituents at a town hall last week that an increase in the top rate is slated to be discussed in the Senate Finance Committee, but added “that doesn’t mean it’s going to happen.”
“It’s certainly on the table,” House Ways and Means Committee member Nicole Malliotakis of New York said Monday on Bloomberg Television. orted.
Lawmakers interested in the idea argue that it would be good politics to raise taxes on the wealthy to create new working class tax breaks, including a possible increase in the child tax credit.
Raising an additional $400 billion from millionaires is approximately enough money to increase the child tax credit for parents to $2,500 from $2,000, according to Andrew Lautz of the Bipartisan Policy Center. The general rule of thumb is that a $1,000 increase in the child tax credit costs about $700 billion, he said.
Lawmakers have wide latitude to debate the level of a new rate and at what income threshold it kicks in. For example, lawmakers could have the higher tax rate kick in at $5 million in income, generating only $150 billion over 10 years, the Budget Lab estimates. That would affect 75,000 taxpayers, compared to 650,000 taxpayers who would see their taxes rise if the 40% rate applied to income starting at $1 million.
The analyses don’t address if Congress makes any changes to the 20% pass-through deduction. Expanding the top bracket would impact business owners who pay their company taxes on their individual tax returns. Lawmakers like North Carolina’s Thom Tillis have said they are open to the millionaire bracket, but want to include some carveouts for business income.
The U.S. Department of Education plans to resume collecting defaulted student loans on May 5 after a yearslong pause since the pandemic.
The Education Department said it hasn’t collected on defaulted student loans since May 5. The resumption of collections under the Trump administration comes after courts blocked the Biden administration’s attempts to offer student loan forgiveness. The Department of Education said it would start a communications and outreach campaign to ensure borrowers understand how to return to repayment or get out of default.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” said U.S. Secretary of Education Linda McMahon in a statement Monday. “The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear. Hundreds of billions have already been transferred to taxpayers. Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation’s economic outlook.”
The department noted that 42.7 million borrowers currently owe more than $1.6 trillion in student debt. More than 5 million borrowers have not made a monthly payment in over 360 days and sit in default — many for more than seven years — and 4 million borrowers are in late-stage delinquency (91-180 days). As a result, there could be almost 10 million borrowers in default in a few months. When this happens, nearly 25% of the federal student loan portfolio will be in default.
Only 38% of borrowers are in repayment and current on their student loans. Most of the remaining borrowers are either delinquent on their payments, in an interest-free forbearance, or in an interest-free deferment. A small percentage of borrowers are in a six-month grace period or in-school.
Currently, almost 1.9 million borrowers have been unable to even begin repayment because of a processing pause put in place by the previous administration. Since August 2024, the Education Department has not processed applications for enrollment in any repayment plan such as Income-Based Repayment, Income-Contingent Repayment. The Education Department is already working with federal student loan servicers and expects processing to begin next month.
Federal Student Aid plans to restart the Treasury Offset Program, administered by the Treasury Department, on Monday, May 5, 2025. All borrowers in default will receive email communications from FSA over the next two weeks making them aware of these developments and urging them to contact the
The Education Department also plans to authorize guaranty agencies that they can begin involuntary collections activities on loans under the Federal Family Education Loan Program after student and parent borrowers have been given sufficient notice and an opportunity to repay their loans under the law.
Over the next two months, FSA will conduct a communications campaign to engage all borrowers on the importance of repayment. FSA will conduct outreach to borrowers through emails and social media reminding them of their obligations and providing resources and support to assist them in selecting the best repayment plan, like the new Loan Simulator, AI Assistant (Aiden), and extended servicers call times. FSA will also launch an enhanced Income-Driven Repayment (IDR) process, simplifying the time that it will take borrowers to enroll in IDR plans and eliminating the need for borrowers to recertify their income every year. More information will be posted on StudentAid.gov next week. FSA said there will not be any mass loan forgiveness.
More information is available at
In response to the announcement, a student loan advocacy group blasted the move.
“For five million people in default, federal law gives borrowers a way out of default and the right to make loan payments they can afford,” said Student Borrower Protection Center executive director Mike Pierce in a statement. “Since February, Donald Trump and Linda McMahon have blocked these borrowers’ path out of default and are now feeding them into the maw of the government debt collection machine. This is cruel, unnecessary, and will further fan the flames of economic chaos for working families across this country.”
The group said that earlier this year, the Trump administration chose to block access to affordable student loan payments by removing the Income-Driven Repayment and consolidation application and secretly ordered student loan servicers to halt all application processing.
Prior to the Trump administration’s decision to remove IDR applications and halt application processing, over 1 million borrowers remained in a backlog waiting for their application to be processed. Only after pressure from a lawsuit filed by SBPC and Berger Montague on behalf of the AFT did the Administration restore the application. But to date, the administration has yet to begin widespread processing of IDR applications, leaving borrowers in economic limbo.
The Public Company Accounting Oversight Board sanctioned Adeptus Partners and its partner Howard Krant for violations related to supervision, review and quality control.
Krant and the firm violated PCAOB rules and standards in connection with the audits of two issuers: Blockchain of Things and Applied UV.
“Substandard audit work and inadequate quality control put investors at risk,” PCAOB Chair Erica Williams said in a statement. ”When violations like these occur, the PCAOB will take enforcement actions to hold auditors and firms accountable.”
The violations committed by Krant include failing to adequately supervise the engagement teams on the 2020 Blockchain of Things and Applied UV audits, including failing to review the workpapers or obtain computer access to review the workpapers. according to the PCAOB. Krant also failed to properly review the engagement team’s work on deferred revenue for the Blockchain of Things 2021 audit to ensure appropriate audit evidence was obtained.
The firm was also sanctioned for failing to provide reasonable assurance engagement teams performed the audits in accordance with the applicable standards and regulations.
“The firm and one of its partners violated PCAOB standards in the conduct of the audits and failed to implement quality control policies and procedures to safeguard against these violations. The sanctions imposed by the board hold the respondents accountable for those failures,” Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations, said in a statement.
Without admitting or denying the findings, Krant and the firm consented to the PCAOB’s order, which:
- Censures both respondents;
- Imposes a $75,000 civil money penalty on the firm, and a $50,000 penalty on Krant;
- Suspends Krant from associating with a registered firm for one year; and,
- Requires the firm to hire an independent consultant to review and make recommendations to the firm’s system of quality control.
The IRS Whistleblower Office has released its first multiyear
“We need help from whistleblowers — people with firsthand knowledge of non-compliance who are willing to share what they know with us so we can investigate,” said IRS Whistleblower Office director John Hinman in his message prefacing the plan.
The plan reflects a multiyear approach to improving processes and operations, expanding collaboration and outreach and integrating stakeholder feedback with:
- An enhanced claim submission process;
- Effective use of whistleblower information;
- Fair and timely awards;
- Keeping whistleblowers informed of the status of their claims and the basis for IRS decisions on claims;
Safeguarding of whistleblower and taxpayer information ; and,- Supporting the office workforce with technology, training and other resources.
Thirty-eight initiatives will address areas to advance the program, including several to speed claims: a claims portal, more locations nationwide for claim review and better initial analysis, among other measures.
Since 2007, the office has made awards of more than $1.3 billion based on collection of more than $7.4 billion from tips. In fiscal year 2024, the IRS paid awards totaling $123.5 million based on tax and other amounts collected of $474.7 million, the third highest amount in the program’s history. Whistleblowers’ awards are generally 15% to 30% of the attributable money collected.
The
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