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 Kozi Checks & Balances TaxTactics News 
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December 13.2024
2 Minutes Read

Rising Taxes in 2026? How Baselines and the TCJA Impact Your Wallet

Professional man smiling confidently, TCJA expiration context.

Understanding the Budgetary Baseline Debate

Taxes might soon rise for millions of Americans if Congress doesn't act by January 1, 2026. This is because the provisions of the Tax Cuts and Jobs Act (TCJA) are set to expire. While lawmakers discuss ways to address this potential cliff, the approach to measuring the budgetary impact of extending these cuts is a hot topic. Sen. Mike Crapo suggests using a "current policy baseline" rather than the "current law baseline." This means planning for future budgets as if extending the TCJA tax cuts would have no additional impact on revenue.

The Impact on Taxpayers and Government Debt

If the TCJA isn't extended, a significant tax increase awaits nearly 62% of tax filers. On average, taxpayers could face a $2,853 hike with the expiration of individual provisions. However, if lawmakers adopt the current policy baseline for future budgeting, the deficits and national debt could rise as the extension would show zero immediate budget impact. Yet, this doesn't change the actual forecast for increased debt due to lower revenue under extended tax cuts, adding complexity to already intricate fiscal planning.

Why Should You Care?

Most taxpayers are unaware of the looming tax changes. Understanding the potential changes can help individuals better prepare for future financial planning. By learning about these baseline debates, you can have informed discussions and perhaps contribute to a community-wide awareness, ensuring everyone is better prepared for any financial shifts that may come their way.

Tax Deduction Deep-Dives

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07.19.2025

Exploring the EU CORE Proposal: What It Means for Businesses

Update Is the CORE Proposal the Right Move for EU Businesses?The European Commission's recent proposal to introduce the "Corporate Resource for Europe" (CORE) has sparked a significant debate regarding business taxation within the EU. This new initiative aims to levy lump-sum contributions from companies with annual net turnover exceeding €100 million, introducing a unique tiered structure for financial contributions. However, it raises questions about fairness and practicality, particularly regarding businesses that may struggle financially.The Core of the Issue: Tax Structure and Business ImpactCORE, with a contribution range from €100,000 to €750,000, appears straightforward, but it overlooks critical factors in a company’s financial health. For instance, a business with a turnover of €750 million might still incur losses in a fiscal year, yet it is still burdened with this tax obligation. This aspect of the CORE proposal could force struggling companies to divert resources away from essential operations, risking their stability and growth.Comparative Analysis: Balancing EU Revenue Needs and Business ViabilityWhen considering this proposal, it's vital to delve into comparisons with existing taxation structures in EU member states. Many countries employ profit-based taxation, which adjusts to the company’s profitability, thus reflecting a more equitable approach. The CORE, which does not account for profit but strictly turnover, could lead to unforeseen difficulties for businesses, particularly small and medium enterprises that are already navigating a complex economic landscape.Public Reaction and Future ImplicationsThe reception to the CORE proposal has been mixed among business leaders and policymakers. On the one hand, some see it as a necessary step toward a unified EU budget that can adequately fund essential projects. Conversely, others express deep concern over the potential impact on businesses, especially in an economy still recovering from disruptions. As this proposal evolves, it will be crucial to monitor its reception at the ground level and consider adjustments that could alleviate pressures on vulnerable sectors.

07.10.2025

Alabama's Pro-Growth Tax Reforms Aim to Boost Economic Growth

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07.08.2025

How OECD's BEPS Initiative is Shaping International Tax Compliance

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