Wednesday, 19 June 2024

House passes bill to simplify tax code, close loopholes for government contractors

WASHINGTON – On Tuesday, the House of Representatives passed a bill to make the tax code simpler and fairer for American families and increase accountability of how federal dollars are spent.


The Taxpayer Assistance and Simplification Act (HR 5719) strengthens protections against identity theft and tax fraud, expands tax help for low-income taxpayers and stops taxpayer harassment by ending the private collection of federal taxes.


This bill also closes a loophole that allows government contractors to set up sham companies in foreign jurisdictions to avoid paying Social Security and Medicare taxes.


The bill passed the House on a vote of 238 to 179, according to Congressional voting records.


Congressman Mike Thompson voted for the bill, which he also had a hand in helping to draft in his capacity as a member of the House Ways and Means Committee.


“For too long, changes to the tax code have done little to benefit low- and middle-class families,” said Thompson. “But we took a step toward changing that.”


Data clearly suggests that the current tax code puts taxpayers at a disadvantage, Thompson's office reported.


For example, the Government Accountability Office (GAO) found that private debt collectors hired by the IRS placed over one million calls, many to innocent people, trying to reach only 35,000 taxpayers. And the IRS program that oversees debt collection has lost almost $50 million, in part because of the huge bounty paid to private debt collectors. This legislation would stop the IRS’s use of private debt collectors.


Many taxpayers are also not getting their fair share, Thompson's office reported. About 25 percent of households eligible for the Earned Income Tax Credit (EITC) in 1999 did not claim it, and according to the GAO, working Americans may have lost out on approximately $8 billion in unclaimed earned income credits in 2004. HR 5719 would strengthen IRS outreach to make sure people know they are entitled to tax refunds under the EITC. It also would permit the IRS to refer these taxpayers to tax clinics


The legislation also addresses the rise of identity theft by requiring the IRS to notify taxpayers if there’s been an unauthorized use of their identity and it cracks down on misleading Web sites that try to get personal information by imitating the IRS.


It takes steps to close egregious corporate loopholes and stop federal contractors from using foreign subsidiaries to evade Social Security and other employment taxes. Currently, companies can avoid paying their fair share of Social Security and Medicare taxes by creating shell companies in the Cayman Islands. The Taxpayer Assistance and Simplification closes this loophole, which costs American taxpayers almost $100 million a year.


“The average American’s tax payment covers about half a second of spending in Iraq,” said Thompson. “It’s ridiculous that we’re then giving contractors in Iraq a chance to take even more American tax dollars. It’s time we close these loopholes and use our tax dollars where they’re needed – here in the U.S.”


{mos_sb_discuss:3}

Upcoming Calendar

19Jun
06.19.2024
Juneteenth
19Jun
06.19.2024 5:30 pm - 7:00 pm
Free veterans dinner
22Jun
06.22.2024 10:00 am - 1:00 pm
Farmers' Market at the Mercantile
22Jun
06.22.2024 5:00 pm - 9:00 pm
Love of the Land Dinner
25Jun
06.25.2024 10:00 am - 1:00 pm
Farmers' Market at Library Park
29Jun
06.29.2024 10:00 am - 1:00 pm
Farmers' Market at the Mercantile
2Jul
07.02.2024 10:00 am - 1:00 pm
Farmers' Market at Library Park
4Jul
07.04.2024
Independence Day

Mini Calendar

loader

LCNews

Award winning journalism on the shores of Clear Lake. 

 

Newsletter

Enter your email here to make sure you get the daily headlines.

You'll receive one daily headline email and breaking news alerts.
No spam.