Bergen Bar Tax Bulletin: Vol. 38, No. 9

Written by: Theodore M. David, Chair, Tax Law Committee

Current Items:

1) Fun Times at the FBI
2) IRA? Or Whatever You Call It

1) You may have noticed that no bar bulletin filled your inbox for June, July or August. I have dealt with the onslaught of my lawyer colleagues demanding answers to why I have been so lax. I have responded to each of them in a handwritten letter, including a fist full of sand as an explanation. During the summer, laziness is more contagious than the coronavirus. It starts with one ice-cold beer and before you know it, it’s September. By now, I’m sure you have heard that the FBI, IRS, CIA, SEC, FDA, USDA, FCC and your grandmother’s next-door neighbor are looking into the late Great President’s personal and not-so-private affairs. I can only imagine how much fun the FBI agents had executing that search warrant in Mar-a Lago. I remember back during my days at IRS when the FBI and IRS got the chance to break down doors at Studio 54 in New York City. Everybody was wearing those nylon jackets with oversized white letters on the back, just like you see in the movies. Our criminal tax guys at IRS had the chance to take their weapons out of cold storage just for the day. Everyone had a great time. I would’ve loved to be at this year’s search party. At a fancy golf course to boot. You may remember a few years back when Donald Trump called the Justice Department and FBI a bunch of “thugs.” In a subsequent bar bulletin, I told the President that it would make sense to apologize. But did he listen? Of course not. So how did that all end up? A slew of folks in tacky nylon jackets crawling all over the place. The newspapers and the internet are full of all kinds of accusations and the president says his best driver is missing from his golf bag. Democrats say Putin, not the FBI took it. Needless to say, this mess will continue.

2) A can of baked beans at your local grocery store has doubled in price. Even Ronzoni pasta cannot be had at the old 10/10 price. A one-bedroom condo in the middle of nowhere is now half $1 million. Inflation and a climate that is slowly killing us as well. So how do you fix such problems? That is fix a problem that we ourselves have created without asking anyone to change any of their behaviors. This sleight of hand can only be accomplished by true politicians. Start by creating legislation with a catchy name like “The Inflation Reduction Act of 2022.” Never mind the fact that the acronym IRA has been somewhat overused in the last half-century and calls to mind all types of individual retirement plans. More importantly, those politicians made sure the bill runs 730 pages which guarantees no one will read it. Certainly not someone with feet casually wedged in the gentle surf. But fortunately, I have found enough references to compose this bulletin. So here it goes: At the EDF (Environmental Defense Fund) site:
It’s a new day in the fight against climate change, thanks to the Inflation Reduction Act. With its $369 billion in climate and clean energy investments, the IRA is the largest, most ambitious climate legislation Congress has ever passed. Multiple independent analyses show the bill will reduce U.S. greenhouse gas emissions some 40% below 2005 levels by 2030, a big step toward President Biden’s goal of cutting them in half by 2030. This sweeping legislation will help families, communities and businesses across the U.S. It will create more than 9 million clean energy and manufacturing jobs.
The White House says, “by the numbers:”

• $14,000 in direct consumer rebates for families to buy heat pumps or other energy-efficient home appliances, saving families at least $350 per year.
• 7.5 million more families will be able to install solar on their roofs with a 30% tax credit, saving families $9,000 over the life of the system or at least $300 per year.
• Up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles, helping families save $950 per year. 55: the number of America’s largest, wealthiest corporations that got away without paying a cent in federal income taxes in 2020.
• $160 billion: how much the top 1 percent of earners is estimated to evade each year in taxes. IRS will get lots to modernize and increase enforcement.
• 15%: the minimum tax on corporate profits the Inflation Reduction Act imposes on the largest, most profitable corporations.
• $124 billion: savings over 10 years the Inflation Reduction Act will generate from collecting taxes already owed by wealthy people and large corporations, according to the Congressional Budget Office.
• And no family making less than $400,000 will see their taxes go up a penny.
• read more next month perhaps…. when summer has ended.

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