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TaxBuzz Top 5 - NY Gov. Proposes Business Tax Hike, Biden Would Not Pardon Son & More

TaxBuzz Top 5 - NY Gov. Proposes Business Tax Hike, Biden Would Not Pardon Son & 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. Governor Hochul Halts NYC Congestion Pricing, Proposes Business Tax Hike

Credit: Alexander Spatari/Getty Images

On Wednesday, New York Governor Kathy Hochul (D) infuriated environmentalists and public transit advocates by halting the planned congestion pricing tolls in Manhattan, which aimed to reduce traffic and fund the city's subway system. However, suburban commuters were pleased. Per the AP, Hochul’s decision derailed a program years in the making that was scheduled to launch June 30, 2024.

In a scramble to replace the anticipated $1 billion annual revenue from the tolls, Hochul proposed a payroll mobility tax hike on New York City businesses. This measure faces strong opposition from legislators, who are expected to end their session on Friday. "To tell New Yorkers that you care about the cost of living and then propose a raise on their taxes is incomprehensible," said Democratic Sen. Zellnor Myrie.

The Metropolitan Transportation Authority (MTA) had allocated over $400 million for congestion pricing infrastructure. Now, with the program paused, the future of mass transit capital improvements remains uncertain. Per Politico, Sen. Liz Krueger noted that the proposed tax would ultimately burden workers, not corporations. “I believe the governor did misjudge this,” she added.

2. President Biden Says He Would Not Pardon Son, Hunter, Amid Gun, Tax Trials

In an exclusive interview with ABC News anchor David Muir at the Normandy American Cemetery on the 80th anniversary of D-Day, President Joe Biden stated he would not pardon his son Hunter amid his ongoing felony gun trial. When asked if he would accept the outcome of Hunter's trial in Wilmington, Delaware, the president affirmed, "Yes," and also confirmed he would not consider a pardon for his son.

Hunter Biden faces three felony charges related to his attempts to obtain a firearm in 2018 while allegedly addicted to drugs. This historic trial marks the first time a sitting president's son has faced a criminal trial. Hunter Biden pleaded not guilty last October following his indictment by special counsel David Weiss.

Although the President did not specifically address his son's tax crime charges, it can be assumed he holds the same view regarding that ongoing situation, which is currently set to be tried in September 2024. The full interview can be seen on ABC's "World News Tonight with David Muir."

3. Denver Health Seeks Sales Tax Increase to Avert Financial Crisis

Credit: milehightraveler/Getty Images

This fall, Denver voters may decide on a sales tax increase to support Denver Health, which faces a potential financial crisis due to rising healthcare costs and more uninsured patients. The proposed 0.34% sales tax hike, passed by a city council committee on Wednesday, now heads to the full council and potentially the November ballot.

“I think a lot of individuals roll the dice, hope that they're not going to get sick, but when they are sick, they often present themselves to Denver Health,” said CEO Donna Lynne in a report from Denver News 7. Since 2019, uncompensated care has surged from $42 million to $103 million, with projections reaching $124 million next year. Despite state support and cost-cutting measures, the financial gap remains significant.

The tax would add three cents to every $10 spent in Denver, generating about $64 million annually. Without it, Lynne warns of potential service cuts. “We would hate to start from zero again if those programs were cut,” said Mariana Del Hierro, pointing out the value of Denver Health’s mobile units.

If approved, the sales tax increase will take effect on January 1.

4. Trump's Tax Cut Plans Potentially Threaten Trillions in Debt

The prospect of new tax cuts next year is helping Donald Trump attract Wall Street donors but could potentially add trillions to the national debt. Extending the 2017 tax cuts is estimated to cost $4.6 trillion, according to a Bloomberg report, but some Republicans believe the cuts will spur economic growth that surpasses that number. However, independent analyses show Trump's 2017 tax cuts did not pay for themselves, nor are they likely to if renewed in 2025.

“We really do need to be on a fiscally sustainable path,” Treasury Secretary Janet Yellen said, noting the Trump tax cuts “caused a huge increase in the deficit.” Despite this, House Majority Leader Steve Scalise argues, “When we cut taxes, the federal government actually took in more revenue the following year because our economy took off.”

The U.S. debt load and interest costs have soared due to previous tax cuts, pandemic stimulus, and recent spending initiatives. Debt held by the public rose from 76% of GDP in 2017 to 97% in December. Annual net interest payments surged from $263 billion to a projected $890 billion this year, surpassing the Defense Department budget. President Biden proposes extending lower rates for individuals earning less than $400,000 and raising taxes on corporations and the wealthy to offset costs.

5. 33% of Oklahoma Private School Tax Credit Recipients Earn Over $150K

Credit: Klaus Vedfelt/Getty Images

Data from the Oklahoma Tax Commission shows that about one-third (approx. 33%) of families receiving the state’s Parental Choice Tax Credit for private school tuition earn over $150,000 annually. Of the $150 million allotted for the program, $49 million went to these "low priority" families, despite the program’s intent to assist lower-income households. The tax credit plan, approved in 2023 after the failure of a private school voucher system, aims to provide private education access to low-income families.

As reported by Oklahoma City news network, KFOR, Senate President Pro Tempore Greg Treat shared the importance of an income limit during negotiations, but House Speaker Charles McCall disagreed, advocating for universal access. The resulting compromise prioritized families earning below $150,000, yet substantial funds still benefited higher-income families.

State Representative Andy Fugate criticized the program, pointing out that significant funds support families already affording private education. He also pointed out the lack of data on whether these families already had children in private schools, suggesting this omission was intentional. No Republican legislators who supported the tax credit program provided comments on the income distribution according to KFOR.

Feature Image Credit: Alexander Spatari/Getty Images

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