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And the risk of more such damaging measures should be kept in mind and steps taken, when progressives are in power, to do what one can to avoid that being the way new (or old) commitments end up getting paid for. end/

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Notably, the recent passage of this summer’s reconciliation bill—with its highly regressive financing—and Trump’s tariffs show the kinds of damaging measures that some would use to pay for the govt.

For instance: a paid leave program financed with a small payroll tax (as leading senators have proposed) may end up with more progressive results than one paid for from a slate of high income and corporate tax provisions (policies I also support and hope are enacted).

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Policies that seem more progressive may be exactly the opposite when the ultimate financing is properly considered. And, it can lead to a re-evaluation of the wisdom of policy.

Answering that critical q requires analyzing the politics of the government–and under not just one’s preferred leaders but the ones we have and could have in the future–and asking what they will use to pay for new commitments by the govt.

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Distribution Reimagined: Determining a Policy's Ultimate Financing

Sharing a new paper forthcoming in Harv. J. on Legislation. Takes a step back to ask when policymakers enact a new spending program or a tax cut, who pays for the policy? Policymakers may not say or, even if they do, what they say may not be the ultimate financing. papers.ssrn.com/sol3/papers....

papers.ssrn.com

Policymakers are considering enacting either a new spending program or a tax cut. Who pays for the policy? The answer to that question is central to understandi

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Reposted by David Kamin

Chye-Ching Huang @dashching.bsky.social · 24/06/2025

THREAD: GOP Senators say they're trying to scale back the SALT cap relief in the House bill. But could the approach to SALT in the Senate bill actually end up *more* generous & costly overall than the House bill? Do Senators – or does anyone – even know, despite the intense political focus on SALT?

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Reposted by David Kamin

Chye-Ching Huang @dashching.bsky.social · 30/05/2025

THREAD Markets are waking up to a provision buried in the House bill that could undermine the demand for US Treasuries at a time when bond markets are already jittery: www.ft.com/content/b400... www.bloomberg.com/news/article...

ft.com

Foreign tax provision in Trump budget bill spooks Wall Street

Legislation would erode the appeal of US financial assets, warn banks and investors

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David Kamin @davidkamin.bsky.social · 20/05/2025

(3) While SALT cap shouldn't be used to finance this regressive / unfair bill and instead for other purposes, that's the right thing for this policy. This reading is clear in the text but contrary to public reporting / others initial reading. They should stick w/ this version.

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David Kamin @davidkamin.bsky.social · 20/05/2025

More from @taxlawcenter.org on House reconciliation bill. (1) Close reading of bill shows text curtails SALT cap workarounds for all biz (including 199A biz). That’s good news IF it sticks. (2) OTOH, bill slashes clean energy credits and imposes unworkable red tape. Bad news.

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(7) And even as the IRS is radically cut making it even harder to administer any such misguided EITC precertification program even as higher income Americans escape from audit when it comes to complex tax planning. end/

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(6) This is about making it harder for lower-income working families to get access to one of the key supports – even while those with higher incomes face no such barriers, whether it be in cutting their rate by 23% for biz income or claiming other tax expenditures.

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(5) We can have a serious and worthwhile discussion about how to improve compliance up and down the income spectrum. But, between radical cuts to the IRS and gameable / hard to enforce new provisions in this bill, this isn’t about compliance.

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(4) The contrast between an expanded special deduction for biz income disproportionately for highest income + no tax on tips / overtime to the new, burdensome precertification system for working families getting the EITC is particularly stark.

Chye-Ching Huang @dashching.bsky.social · 13/05/2025

(1) Two new pieces from @taxlawcenter.org on tax provisions in the House reconciliation bill. Detailing unfair and complex new provisions to the benefit of those with higher incomes and then onerous provisions on lower-income working families.

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Reposted by David Kamin

THREAD: the Ways & Means bill creates new opportunities for tax avoidance and evasion, adds complexity to the tax system, and increases filing burdens for low- & moderate-income families. My @taxlawcenter.org colleagues have more analysis coming, but here's a starter list (suggestions welcome):

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(12) There’s much more to be said (and much more reading to do) and @taxlawcenter.org will have more to say as we do.... end/

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(11) Now, it’s much more of a Frankenstein when it comes to the tax base. Some of those elements remain but even more mixed with unfair / complex / expanded giveaways -- all the while losing trillions in regressive fashion.

(10) The draft stands in contrast to some of the philosophy 2017, with the notable exception of 199A. That bill lost trillions. But, had a number of real base broadeners / simplifications. Like limiting mortgage interest deduction. Swapping itemized for standard deduction.

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(9) And, there are large cutbacks in tax credits for clean energy. That brings me to the fact that it’s not about having a “pure” base. It’s about treating fairly and using limited resources to benefit those who need it and encourage activities we should have (like clean energy).

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(8) And there's effectively a 35 percent cap on the value of itemized deductions. That's a good move--actually building off Biden / Obama. So, for that, but not to pay for even more regressive and complex tax cuts.

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(7) There are some revenue raisers too. There’s the SALT cap. But, loosened to regressive effect. And endorsing the SALT workaround for pass throughs so long as they’re eligible biz under Section 199A. So, here too, architects (and others eligible) are great! Doctors are not!

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Tip of the iceberg? How tax-free tips could sink the tax system

(6) Should there be some de minimis for cash tips or other simplifying system, maybe? But, anything involving broad exclusions like these will be regressive and hard to administer. For more: medium.com/@taxlawcente...

medium.com

By: Mike Kaercher and Chye-Ching Huang

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(5) Unlike 199A, these aren’t about super high income. But, higher-income workers can still get it since eligibility goes up to someone making $160,000 / yr. And those in higher brackets will get the most – well, if they are “winners” and get cash tips or overtime.

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(4) Then there’s the tips and overtime. We knew these were coming from the campaign, but, still, to have new provisions which entirely exclude this kind of income from the tax system is…well…not good.

(2) Let’s start off with the original sin of the 2017 law, Section 199A. Allowing people in certain sectors (but never employees because employees aren’t winners!)—and including some of those with the highest income—to cut their tax rate by 20%. Now, 23%. Going in wrong direction.

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David Kamin @davidkamin.bsky.social · 17/04/2025

(1) There’s a lot in W+Ms draft bill. We knew it'd be losing trillions of $$$ and in regressive fashion. But provisions also pick winners+losers often in unjustified ways and give us an (even more) swiss cheese tax system that’d generally be harder to administer and unfair in new ways.

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A letter from many of the @nyulaw.bsky.social faculty on importance of academic freedom and rule of law, which are under threat. We have many different perspectives and should on law and policy, but these are core principles in support of which we stand together. drive.google.com/file/d/1yysJ...

drive.google.com

NYU LAW FACULTY LETTER_041725.pdf

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Reposted by David Kamin

The Tax Law Center at NYU Law @taxlawcenter.org · 04/04/2025

On 4/9, join us for a conversation about DOGE & the administrative state, featuring former Treasury Deputy Secretary Wally Adeyemo and Tax Law Center experts including former OMB Director Shalanda Young and professors @lilybatch.bsky.social & @davidkamin.bsky.social taxlawcenter.org/events/nyu-l...

taxlawcenter.org

NYU Law Forum | The DOGE Era: Impoundment, Data Privacy, and the Administrative State

Join the NYU Law Forum for a conversation about DOGE and the administrative state, including impoundment and data privacy issues. The conversation will feature Former Treasury Deputy Secretary Wally A...

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(18) So, while it is Trump who started this, the tariffs will only stay if Congress and the courts fail to respond as they should. end/

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(17) I can think of few economic questions more major, and more at the core of the economic powers that are Congress’s. There is no clear—or even unclear—delegation of such vast authority.

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(16) Can the emergency powers granted under IEEPA only “to deal with an unusual and extraordinary threat” and then with a list of actions that doesn’t even use the word “tariff” be used to reshape the U.S. economy with tariffs and finance the very tax cuts Congress is now considering?

(15) And so on. Because major question. And Congress hasn’t spoken clearly enough to delegate such a major power.

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(14) And, the Supreme Court said “waive or modify” isn’t clear enough in the Higher Ed Act to allow the Biden Ed Dep’t to forgive student debt during COVID.

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(13) But, to sum this up. The Supreme Court has in recent years said that “best system of emission reduction” in the Clean Air Act isn’t clear enough to allow the Obama EPA to create a cap and trade system to address climate change.

The Case Against IEEPA Tariffs

(12) Others have done a nice job laying out how that doctrine is totally inconsistent with the power Trump now claims. For instance: www.lawfaremedia.org/article/the-...

lawfaremedia.org

Forcing Trump to use trade statutes—or to go to Congress to seek new authorities—would be more consistent with IEEPA’s history and practice.

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(11) Putting aside me: the current courts have been even more skeptical of delegations, requiring Congress to speak really clearly (sometimes too clearly) to delegate big things. This is the major questions (and related) doctrine.

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(10)And, I’m a believer in Congress being able to delegate big powers to solve big problems to the executive (and to sometimes make big mistakes). But, there still has to be an actual policy decision by Congress to establish the framework and delegate power – I just don’t see that here.

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(9)This then brings me to the courts. The courts would have no role if Congress had in fact delegated this authority to the President. That would have been a bad idea, but it’d be a mistake for Congress to make and for the courts to allow.

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