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TaxBuzz Top 5 - Biden Calls For New Wealth Tax, Fyre Festival Tax Drama & More

TaxBuzz Top 5 - Biden Calls For New Wealth Tax, Fyre Festival Tax Drama & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Biden Calls For New Wealth Tax If Re-Elected

Credit: Jacquelyn Martin-Pool/Getty Images

Calls for a wealth tax on the world’s super-rich are gaining momentum after U.S. President Joe Biden's proposal for a "billionaire tax." Per CNBC, Biden plans to impose a 25% tax on Americans with wealth exceeding $100 million, emphasizing fair taxation and addressing income disparities. The proposal has reignited global discussions on wealth inequality and public finances.

In late February and early March, global finance ministers at a G20 summit explored plans for a global minimum tax on billionaires. Phil White, a retired business owner and member of Patriotic Millionaires, voiced support, stating, "This is about the wealthy contributing more to society." Despite debates over effectiveness and feasibility, Biden's proposal aims to raise $500 billion over ten years, aligning tax rates for billionaires with those of average American workers.

The move reflects growing calls for progressive tax policies to address widening wealth gaps. Advocates argue that such measures could fund critical social programs, such as child care and paid parental leave, while promoting economic fairness. As discussions continue, the role of wealth taxes in addressing wealth inequality remains a focal point for policymakers worldwide.

2. Bernie Sanders Proposes 32-Hour Workweek Bill

Senator Bernie Sanders (I-Vt.) has introduced a bill aiming to establish a standard four-day workweek in the United States without any reduction in pay. Under the proposed legislation, over a four-year period, the threshold for overtime pay would be lowered from 40 hours to 32 hours. This would entail overtime pay at 1.5 times a worker’s regular salary for workdays exceeding 8 hours and double the regular salary for workdays exceeding 12 hours.

The "Thirty-Two Hour Workweek Act" also emphasizes protecting workers’ pay and benefits to prevent any loss in income. Sanders views this as a crucial step toward ensuring that workers benefit from increased productivity driven by technological advancements. He argues that despite significant productivity gains over the years, many Americans are working longer hours for lower wages. The legislation aims to address this imbalance by redistributing the financial gains from technological advancements to benefit the working class.

Sanders introduced the bill alongside Sen. Laphonza Butler (D-Calif.), with Rep. Mark Takano (D-Calif.) introducing companion legislation in the House. The proposal has garnered support for its potential to allow Americans to enjoy a better quality of life while maintaining their income levels. The Hill notes that Sanders highlighted successful pilot programs and international examples, such as France's 35-hour workweek, as evidence of the feasibility and benefits of a shorter workweek.

3. Georgia Tax Commissioner Failed to Report Over $100K in Earnings to the IRS

Credit: Zach Gibson/Getty Images

Former Worth County Tax Commissioner Tabetha DuPriest has pleaded guilty to one count of making and subscribing to a false tax return after failing to report earnings from her work for four cities on her tax return. DuPriest, who served as county commissioner since 2001 and as President of the Georgia Association of Tax Officials from 2019 to 2021, oversaw tax collections for Sylvester, Poulan, Warwick, and Sumner.

Despite earning $80,000 annually for this role and receiving a Form W-2 from the Worth County Board of Commissioners, she did not declare additional income from her contracts with the cities. According to investigators, DuPriest initially denied any wrongdoing but later admitted to not reporting the income.

Atlanta news network WSB-TV 2 shared a statement from U.S. Attorney Peter D. Leary, who stated, “There is no excuse for a long-time Tax Commissioner to fail to report earnings on personal income taxes, just like other citizens must do. These kinds of schemes undermine the public’s trust and simply won’t be tolerated by our office or our law enforcement partners.”

4. Fyre Festival Founder Owes Over $7 Million in Federal Back Taxes

Disgraced Fyre Festival founder Billy McFarland has found himself in new financial turmoil, with an astounding $7 million in back taxes owed to the IRS -- this is compounded by an additional $26 million in restitution owed to festival victims. Despite the staggering debt, the 32-year-old harbors hope for a potential revival of the ill-fated festival, which he refers to as Fyre Festival 2.

McFarland, who served a four-year prison sentence for his role in defrauding investors, is currently coping with ongoing restitution payments and his hefty tax bill. In an article syndicated to MSN, he has acknowledged adopting a more modest lifestyle while remaining optimistic about the prospect of Fyre Festival 2 alleviating his financial burdens. 

The debacle of the inaugural Fyre Festival, marked by its catastrophic failure and subsequent fallout, saw McFarland's entrepreneurial ambitions spiral into legal and fiscal ruin. Despite facing heavy criticism and legal consequences, McFarland's entrepreneurial spirit persists, evident in his determination to revive the festival brand. 

5. Senate Stalls Bipartisan Tax Bill That Would Expand Child Tax Credit

Photographer: Bloomberg Creative Photos

The Senate has stalled a bipartisan $78 billion tax package that passed the House with overwhelming support, posing challenges for its enactment. The bill, aimed at expanding the Child Tax Credit and reinstating business tax breaks, faces scrutiny over its perceived generosity to low-income families and financing mechanisms.

According to the New York Times, backers hoped for swift approval before tax-filing season's end but face Senate hurdles. Led by Rep. Jason Smith and Sen. Ron Wyden, the bill is funded by curbing the Employee Retention Tax Credit. However, many Senate Republicans are critical, particularly of provisions allowing larger child tax credits based on past earnings and the bill's financing strategy.

Sen. Thom Tillis deems the funding approach irresponsible, emphasizing fiscal conservatism. Additionally, Republicans resent exclusion from negotiations and seek Finance Committee overhauls. Despite Democratic openness, time constraints loom, and Sen. Chuck Schumer hasn't committed to a vote. Amidst partisan discord, the bill's future remains uncertain.

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