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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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08.28.2025

How OBBBA Affects State Taxes: What Taxpayers Need to Know

Update Understanding the State Tax Landscape Post-OBBBA The One Big Beautiful Bill Act (OBBBA) has sent ripples through state tax systems as Congress passes significant federal tax changes. This monumental legislation not only affects federal tax performance but creates a trickle-down effect impacting state tax codes across the nation. Given that many states tether their tax systems to federal provisions, state lawmakers now face pivotal decisions that will affect taxpayers substantially. The Connection Between Federal and State Taxes As states often utilize the federal tax structure as a foundational reference for their tax codes, the provisions of OBBBA can lead to automatic adjustments in state tax bills. These changes can profoundly affect personal deductions and business tax structures, influencing overall economic growth. For instance, the new personal deductions introduced have been critiqued for providing limited benefits, potentially leaving many taxpayers in a challenging position as they navigate these changes. Pro-Growth Business Provisions One of the positive aspects of OBBBA is its emphasis on pro-growth business provisions aimed at removing barriers to investment and job creation. Such provisions are likely to incentivize businesses to flourish, stimulating the economy within states. By fostering investment, these initiatives can lead to job creation and higher tax collections in the long run. Implications for State Budgets As state budgets are influenced by federal laws, state lawmakers need to strategize their fiscal policies in the context of the new federal landscape introduced by OBBBA. Understanding these implications is essential for local businesses and individuals who need to prepare for the budgetary adjustments that come with these federal changes. Actionable Insights for Taxpayers Taxpayers should keep an eye on how changes in the OBBBA affect their specific states. Engaging with local lawmakers about tax policies and staying informed through trusted resources can empower taxpayers to navigate these changes effectively. This proactive approach is essential as individuals and businesses adjust to the evolving tax environment.

08.27.2025

Why the BLS Must Remain Politically Neutral for Effective Taxpayer Protection

Update Understanding the Role of the Bureau of Labor Statistics (BLS)The Bureau of Labor Statistics (BLS) is a crucial entity that gathers economic data to reflect the state of the U.S. economy. One critical role of the BLS is to provide accurate inflation figures, which are essential for policy decisions at both governmental and individual levels. However, recent events have raised concerns over potential political influence on the BLS's operations. When inflation is inaccurately reported, it can lead to widespread consequences, affecting everything from tax rates to government spending.The Consequences of Misinformed TaxpayersAs highlighted by the recent discussion surrounding the nomination of E.J. Antoni, there is a danger that politically motivated alterations in economic reporting could mislead taxpayers. With inflation often dubbed a "hidden tax," any misrepresentation in data can limit the purchasing power of citizens, making goods and services costlier over time. This could result in unintended financial distress, as taxpayers grapple with higher costs while their salaries remain stagnant.Balancing Data and PoliticsIn a well-functioning democracy, economic data should serve the public interest, unaffected by partisan agendas. The integrity of the BLS is essential; its reports must be held as benchmarks of truth for sound economic policy. If the administration seeks to influence outcomes through selected data manipulation, it risks losing public trust, leading to poor policy choices that may exacerbate economic challenges.Future RepercussionsThe integrity of economic data cannot be understated. If the BLS sways into the political arena, we could see a future where decisions are made based on distorted realities rather than factual data. Policymakers must commit to preserving the autonomy of key data-gathering institutions to ensure taxpayers receive accurate information upon which they can base important financial decisions.

08.23.2025

How the One Big Beautiful Bill Act Affects Gambling Loss Deductions

Update New Tax Rules Leave Gamblers in a BindA recent tax code change under the One Big Beautiful Bill Act (OBBBA) has caused a stir among gambling enthusiasts across the United States. The bill introduces a limitation that permits gamblers to deduct only 90% of their losses when offsetting winnings, down from the previous full deductibility. This amendment presents a stark penalty, especially impacting professional gamblers and casual players who engage frequently in betting.Understanding the Financial ImpactPrior to this change, players like Daniel Negreanu, renowned in the poker world, would utilize their losses to balance out taxable income effectively. In 2025, Negreanu's earnings at the World Series of Poker totaled $1,478,240 against buy-ins of $1,297,143, resulting in significant income that would typically be taxed. Under earlier rules, his tax liability would have left him with a substantial take-home amount. Now, with the new rules, Negreanu's take-home pay drastically reduces, exemplifying the financial strain this policy places on high-stakes players who already work on slim profit margins.Legislative Insights Into Tax GainsThe OBBBA is estimated to yield $1.1 billion in tax revenues over eight years, as per the Joint Committee on Taxation's forecasts. However, there are warnings against the potential repercussions of this legislation. By effectively penalizing legal gambling practices, it may incentivize some professional players to seek gambling opportunities outside legal markets, including illicit platforms. Should this occur, there could be a reverse effect, diminishing the projected tax revenue altogether while also pushing more gambling underground.The Wider Implications for Gamblers and TaxpayersAs lawmakers encourage gambling as a viable source of income for states, contrastingly, policies like the OBBBA risk erasing those gains by discouraging players to participate in the legal gambling ecosystem. Furthermore, this could pose a challenge for tax authorities, who may face reduced compliance as gamblers opt for unregulated avenues. The significance of this change cannot be underestimated, as it directly affects not just individual fortunes but also broader economic stability and tax revenue levels.

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