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Tax Pre-Season Is Underway with (Un)usual Jockeying, a New Simpler W-4 and a Better Deal for Low-Income Tax Filers

This week, Governing’s Future of Finance examines the moves made in advance of tax season, California’s crackdown on traffic fine scofflaws, the world’s largest money manager is making the climate crisis its primary investment criterion, and MIT’s “significant” Jeffrey Epstein mistakes.

Welcome to the Future of Finance, all in a tidy little package:

Give Us a Break: In the name of giving “every Iowan a chance to succeed” in the new decade, Gov. Kim Reynolds is calling on state legislators to raise sales tax by a penny but lower the state income tax to put money back in taxpayers’ pockets. Down and to the right, the Florida House, backed by select corporate lobbyists, wrote a tax package that would have netted a small number of companies $50 million in tax breaks. Once the math was done, the Chamber of Commerce cooled on the idea.

Gates, Buffett and Now Disney — Not Taxed Enough: Bill and Warren have been on the record about it for some time. Abigail Disney has talked about it before too. But now, the Disney heiress has testified in favor of California Senate Bill 37, which would force large corporations to pay higher taxes. Disney stipulated that she wasn’t speaking in any kind of official capacity, but she acknowledged that her last name carries weight.

Poorer California Drivers — Not Paying Fines Because They Can’t: It can be expensive to drive in the Golden State — a right turn on red without a full stop costs $500; blocking a wheelchair access curb is worth a $1,100 fine; and, some car owners have been hit with a $1,000 ticket because the paint was peeling on their license plates. But Gov. Gavin Newsom’s budget recognizes that not all scofflaws are created equal. It proposes a new statewide program that provides relief for low-income motorists who are unable to afford the full cost of these and other fees and fines.

It Isn’t TurboTax but It Is a New Form Two Years in the Making: The 2018 federal tax changes brought with them the promise of a new streamlined tax form. The IRS has fulfilled that promise with an all-new W-4 this year. It is intended to be less complex and more transparent, but as with all things, it comes with a potential hitch or two.

It Is TurboTax and It Changes the Game for Low-Income Tax Filers and the Industry Itself: Reporting by ProPublica revealed that TurboTax’s host company, Intuit, which had originated a free filing service for low-income taxpayers had been deceiving customers into paying for what could have been free. The IRS responded by dropping a long-standing agreement not to compete with industry by developing its own tax filing software.

Maximizing Shareholder Value Takes Backseat to Climate Crisis for World’s Largest Investor: In its annual shareholder letter, BlackRock — the world’s largest investment firm with some $7 trillion under management — is changing how it values investments. The New York Times reports that the letter reads in part, “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.” (New York Times — January 14, 2020)

MIT’s “Significant Mistakes” in Its Dealings with Jeffrey Epstein: MIT has released the results of an outside investigation into the university’s links with alleged sex trafficker Jeffrey Epstein, who donated $850,000 from 2002 to 2017. The report details, according to MIT Technology Review, “serial failures to do due diligence … and the fact that MIT officials initially wanted to clear Epstein donations of up to $10 million.”  (MIT Technology Review — January 10, 2020)



Paul W. Taylor is the Executive Editor at e.Republic and of its flagship titles - Governing and Government Technology. He can be reached at ptaylor@governing.com or on Twitter at @pwtaylor.
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