IRS IT, The Messiness of Medicare Money, and Disney’s Special Tax Zone
GAO: IRS needs an IT upgrade ASAP. In a recent analysis of the IRS’ information technology environment, the Government Accountability Office determined that about 33 percent of the agency’s applications were considered legacy and out-of-date. Some applications are between 25 to 64 years old, and some software is up to 15 versions behind the latest iterations. These old programs will continue to contribute to security risks, unmet mission needs, staffing issues, and increased costs, the report says. GAO’s nine recommendations are outlined here.
The Medicare financing mess is bigger than you think. TPC’s Gene Steuerle argues that Congress must address the financing side of Medicare reform more broadly. The program’s funding comes from 15 different revenue streams, working against the trust fund logic of requiring Congress to strike a balance between how much it wants to pay providers and how much it wants to collect from taxpayers. “If [Congress] tries simply to jerry-rig the system one more time … it may only add to its long-term financing conundrum.”
Florida Gov. Ron DeSantis could soon take over Disney’s tax zone. The company has managed the Reedy Creek Improvement District for over 50 years, taxing itself to cover the cost of providing water, power, roads, and fire services to the area around its Orlando theme parks. In retaliation for Disney’s opposition to DeSantis’ “Don’t Say Gay” legislation, the governor threatened to dissolve the district. Instead, by way of compromise, state lawmakers have proposed to change its name to the “Central Florida Tourism Oversight District” and allow the governor to appoint all five of the district’s board members. The legislation could see a vote during a special two-week session that began this week.
Puerto Rico’s Gov. Pedro Pierluisi proposes tax cuts and simplification. This week he unveiled a plan that would cut individual and corporate taxes by $546 million annually. It would reduce top individual rate from 33 percent to 30 percent and the marginal corporate rate of 37.5 percent to between 17 percent and 33 percent, depending on the corporation’s size. Puerto Rico’s oversight board and Congress would need to approve the measure.
Massachusetts lawmaker introduces tax credit for local newspaper subscriptions. A state representative wants to give taxpayers a $250 credit for their subscriptions to community-based news outlets that produce “original content derived from primary sources and relating to news and current events” and employ at least one local news journalist who resides in the community. Journalism professor Dan Kennedy of Northeastern University questioned whether the proposal would be “more symbolic than substantive.”
In the United Kingdom, no increase to the windfall tax. Chancellor of the Exchequer Jeremy Hunt said he won’t increase the UK’s windfall tax on oil and gas companies. The opposition Labour Party has called for hikes to the levy after Shell and BP posted record profits. The tax remains at 35 percent. Labour would rather it be as high as Norway’s rate of 78 percent, retroactive through 2022.
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