Government

IRS Delays Taxes on $600 Reporting Threshold

22 December 2023
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Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following response to an announcement by the Internal Revenue Service (IRS) that the agency will again delay implementation of the lower threshold for 1099-K reporting (which went from $20,000 to $600 in the American Rescue Plan) for the 2023 tax year.

“The IRS was wise to make this decision given the potential for massive taxpayer confusion and the general lack of awareness and clarity on the new 1099-K threshold. At least 44 million new forms were expected to flood into the mailboxes of unsuspecting citizens who sell used items online, for example, and many taxpayers receiving these forms would not be required to do anything. But how are they supposed to know that? The absurdity of the new reporting threshold has created a massive make-work scheme for payment apps and online marketplace. It has generated significant waste and depleted resources within both the private sector and at the IRS.”

“Congress and President Biden need to be advancing policies that make things simpler, more efficient, and less costly. The new threshold requirement does exactly the opposite. While we are pleased that the IRS has once again delayed implementation of the new threshold, Congress should repeal this intrusive reporting scheme by passing the Stop the Nosy Obsession with Online Payments Act (SNOOP Act) either separately or as advanced by the House Ways and Means Committee in a broader tax relief and reform package this past June.”

In its announcement, the IRS stated that it will phase in the reporting requirement, and is planning for a $5,000 threshold for tax year 2024 and will eventually get to the $600 reporting threshold enacted under the American Rescue Plan (ARP).

Inflation Dominates List of Concerns of Voters

22 December 2023
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By Tom Gantert, The Center Square

Inflation and price increases are by far the most important issue facing the country.

That’s according to The Center Square Voters’ Voice Poll conducted from Oct. 20-26, 2023, in conjunction with Noble Predictive Insights.

Other top concerns were Illegal Immigration (33%); Crime/violence (28%); Economy/jobs (24%).

The poll data showed that 48% of registered voters said inflation was the most important issue in the U.S. Illegal immigration had the second most support among registered voters at 35%. Crime and violence was the third most popular pick at 27%.

The poll reported that 95% of registered voters said they have seen prices increase over the last few years with 5% saying they have seen no change.

Among those who reported seeing price increases, 96% said the cost of groceries had increased and 82% said the cost of gasoline had increased.

Another 74% said their utility bills had increased.

“It’s not surprising that inflation is the top concern among voters,” said Antony Davies, an economist at Duquesne University. “Today’s grandparents were teenagers the last time Americans faced double-digit inflation. Politicians have done their best to deflect blame to the greed of corporations, leaving unaddressed the question of whether decades of low inflation were due to corporate altruism. The seeds of today’s inflation were laid during COVID when the Federal Reserve was expanding the money supply to pay for multi-trillions in government spending that Washington couldn’t afford.

One measure of inflation is the Consumer Price Index, which the U.S. Bureau of Labor Statistics describes as “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.” 

The BLS bases CPI on the cost of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs and other products and services that people purchase on a daily basis.

From 2013 through 2020 in the mid-Atlantic region, the monthly percent increase in CPI ranged from as low as negative 0.2% in April 2015 to as high as 2.9% in June and July 2018.

But in 2021, monthly increases in CPI started occurring. CPI increased by 4.2% in April 2021 and then rose as high as 7% in December 2021. In 2022, the CPI monthly increases ranged from 6.5% to as high as 9.1%.

In 2023, the monthly increases in CPI have hovered at 3.7% in August and September.

The poll surveyed 2,605 voters and included 1,035 Republicans, 1,074 Democrats, and 496 Independents. The poll has a margin of error of 1.92%.

Farmers Among Businesses Required To do More Federal Reporting

20 December 2023
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A new federal reporting requirement aimed at reducing corporate crime will affect some Montana farmers, ranchers and businesses, according to Montana State University Extension.

Beginning on Jan. 1, 2024, certain corporations, limited liability companies and other entities created or registered to do business in the U.S. will be required to report information about their beneficial owners to the Financial Crimes Enforcement Network, or FinCEN, within the U.S. Treasury Department.

The new reporting requirement stems from the Corporate Transparency Act, passed by Congress in 2021. It is part of the U.S. government’s efforts to make it harder for bad actors to hide ill-gotten gains through shell companies or opaque ownership structures.

A beneficial owner is an individual who has substantial control over or owns at least 25% of a company.

A company created before Jan. 1, 2024, must file an initial report with FinCEN no later than Jan. 1, 2025. A company registered on or after Jan. 1, 2024, must file with FinCEN within 30 days of registration. Companies will have an ongoing obligation to file an updated report with FinCEN to disclose any changes in previously reported information or to any beneficial owner within 30 days of the change.

Montana farmers, ranchers and businesses can file reports with FinCEN electronically. The form to report beneficial ownership information will not be available until Jan. 1, 2024. Information about the form can be found at fincen. gov/boi.

MSU Extension provides links to FinCEN materials that provide information about the new reporting requirements which can be found at montana.edu/ estateplanning.

Court Vacates Coal Mine’s Permit

20 December 2023
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In a unanimous Opinion, the Montana Supreme Court has upheld a lower court ruling that vacated the State permit that allowed the expansion of the Rosebud coal mine in Colstrip,Montana.

In 2015, the Montana Department of Environmental Quality (DEQ) issued a permit for additional mining to Westmoreland Rosebud Mining. Several conservation groups challenged the permit, arguing it was issued in violation of the legal requirements of the Montana Strip and Underground Mine Reclamation Act.

A district court in eastern Montana agreed and vacated the permit, halting mining activities in the expanded area. However, the Montana Supreme Court temporarily reinstated the permit pending resolution of the legal issue. State law is based on federal requirements for regulating strip mines.

The Supreme Court ruled that the Board of Environmental Review (the Board) made several errors when it upheld DEQ’s finding that Westmoreland had demonstrated that the proposed mining activity is designed to prevent material damage to the hydrological balance in the area.

During the permitting process, Westmoreland acknowledged a projected 13% increase in salinity in the alluvium of East Fork Armell’s Creek from the proposed mining activities.

Although the additional salts in the alluvium would not be a statistically significant concentration, they would increase the length of time during which higher pollutant levels would be present. The Court held that the Board did not adequately analyze whether extending the duration of an existing water quality violation satisfied the legal requirements. Further, the Court ruled that the Board failed to properly consider the cumulative impacts of increased mining activity on the area water quality. The ruling halts mining expansion into Area B of the Rosebud Mine and sends the permitting process back to the Board for additional review.

Americans Moving from High Tax States

20 December 2023
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What do The Rolling Stones, NFL star Tyreek Hill, and Maryland millionaires have in common? They all moved because of taxes.

You may not be a famous musician or a pro athlete, but you too may have considered taxes in deciding, “should I stay, or should I go?” Or maybe not. While high-profile stories abound, what do the data tell us about taxes and migration? Do people—regular people—really move because of taxes?

The answer is complicated, but one thing is clear: Americans are moving from higher-tax states to lower-tax states. This alone doesn’t prove anything, but the most recent IRS data seem to show a connection between taxes and migration:

* Nine of the top 10 states with the largest population gains from 2019 to 2020 have no or low individual income taxes (the most visible of all the tax types, and highly connected to where you live).

* Of the states that saw more income tax filers move in than out, nearly 80 percent had below-average state and local tax collections per capita in fiscal year 2020, while half of the states that experienced more filers moving out than in had above-average collections per capita.

* Similarly, 19 of the 28 states with more people moving in than out had a top marginal income tax rate below the national median, while 16 of the 22 states plus D.C. with more people moving out than in had above-median top income tax rates.

* Among the 25 best-ranking states on the 2020 State Business Tax Climate Index, 20 states gained taxpayers between 2019 and 2020. Among the 25 worst-ranking states on the Index, 17 lost taxpayers to interstate migration.

Of course, correlation does not equal causation, so how do we know taxes play a role in people’s location decisions?

One clue: most studies have found that state and local taxes affect migration, and the effect seems to have become stronger over the years—probably because technology has made it easier for people and businesses to move.

Another clue: survey data. An annual Census Bureau survey asks people who moved why they did it. Though it doesn’t ask about taxes directly, respondents’ answers reveal the indirect influence of taxes. For example, in 2017, 16 percent said they “wanted [a] new or better home,” 11.5 percent said they moved “to establish own household,” and 8.3 percent “wanted cheaper housing,” all of which are influenced by property taxes. And the 9.9 percent who moved for a “new job or job transfer” likely took into account income taxes and benefited from the job opportunities related to the state’s economic competitiveness.

Though people move for many different reasons, the evidence suggests taxes are at least one factor—both directly and indirectly. All things being equal, people prefer lower taxes. They also favor many of the things that a well-designed tax code helps facilitate, like a strong job market and a reasonable overall cost of living.

When people move out of a state, they take their earning power with them. IRS data from 2019 and 2020 shows that most states that lost people to interstate migration also lost adjusted gross income (AGI). Conversely, most states that gained people also gained AGI.

For example, in 2021, California and New York lost $29 billion and $25 billion in AGI, respectively, while Florida gained $39 billion.

And less income in the state means less tax revenue. In 2021, California lost $343 million while New York lost $300 million.

Evidently, people’s migration decisions can affect a state’s economy and budget.

While experts generally agree that taxes play some role in people’s decisions about where to live and work, they disagree over the significance. Some argue that the influence of taxes on migration decisions is so small, policymakers shouldn’t even consider it when designing tax policy.

But policymakers only have so many tools at their disposal to attract people. Not every state can offer warm weather and nice beaches. But they can control their taxes. Prioritizing structurally sound tax policy with low rates will not only lower people’s tax burdens—which clearly attracts some people—but also produce economic growth, increasing the job opportunities and wages that attract others.

Wind Turbines Pose Problems for Nuclear Missile Silos

25 November 2023
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Wind turbines and a growing population are posing new issues of concern regarding Montana’s underground nuclear missile silos. As a consequence the Air Force is asking Congress for help, especially because of “towering wind turbines, which are growing in number and size and are edging closer to the sites each year,” reports the Associated Press (AP).

The Air Force wants Congress to pass legislation to create a 2-nautical-mile buffer zone around each site. Underground silos are located in Nebraska, Colorado, North Dakota, Montana and Wyoming.

“…underground nuclear missile silos are rarely disturbed by more than the occasional wandering cow or floating spy balloon,” notes the AP.

In general the silos are “almost undetectable” located on private farmland, appearing as a small rectangular plot marked only by an antennae, chain-link fence and a flat 110,000 ton concrete silo blast door.

Increasingly, sometimes, stretching for miles, wind turbines tower in proximity, hundreds of feet high, with long, sweeping blades with “parts so large and long they dwarf the 18-wheeler flatbed trucks that transport them to new sites.” They pose a danger for military helicopter crews. “When an alarm triggers at a site, the UH-1 Huey crews fly in low and fast, often with security teams on board.” The turbines not only pose physical obstacles but create turbulence.

Some of the modern turbines have towers as tall as 650 feet, or nearly 200 meters, , “which is twice the height of the Statue of Liberty.” Of the 450 sites, 46 are “severely” encroached upon, which the Air Force defines as having more than half of the routes to the launch site closed due to obstructions

Wind energy advocates are supportive of the restriction, according to AP.

Language to create a setback was included in the Senate version of the 2024 National Defense Authorization Act, but would need to be negotiated into the House version of the bill.

But the service acknowledges the difficult position it is in. The farmers who have allowed it to use their lands for decades benefit from the income from the turbine leases, and the service does not want to appear to push back on environmental energy alternatives, they are nevertheless concerned about the safety for helicopter and nuclear security operations.”

Why do people Move?

25 November 2023
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The Center Square

Getting married – or divorced – was a more common reason for moving in 2022 than the year before while looking for better housing became less common, according to data from the U.S. Census Bureau on why people move.

The Current Population Survey Annual Social and Economic Supplement asks respondents who lived in a different place the year before their primary reason for moving. The 20 specific reasons fall into four general categories: housing-related, family-related, employment-related, and other. 

The most often-cited general category for moving in 2022 was housing-related reasons, which accounted for 41.6% of movers, according to the survey. That’s similar to other recent years. 

A newer, larger or better place to live was the most common specific reason cited for moves in 2022 and in 2021. That was followed by establishing one’s own household. Even so, the percentage of movers reporting upgrades declined.

“This decline suggests reversal of a boom in housing demand that happened in 2020, early in the COVID-19 pandemic,” according to the report. 

The share of movers seeking better housing increased from 14.6% in 2020 to 17.2% in 2021. It fell back to 14.4% in 2022, about the same as the 2020 pre-pandemic baseline. The share of movers who reported wanting a better neighborhood or less crime had a similar decline after a jump early in the pandemic, according to the report. 

Some 26.5% of movers reported family-related reasons, the second most often-cited general reason for moving in 2022 and in recent years. 

Family-related reasons include a change in marital status and establishing one’s own household, according to the report.

“An increase in the share of people who moved due to a change in marital status between 2021 and 2022 may be the result of people resuming plans they had put on pause during the height of the pandemic,” according to the report. “Many couples decided to postpone wedding ceremonies and large gatherings during COVID-19: an estimated 12% fewer marriages and divorces took place in 2020 than researchers expected.”

Employment-related reasons were reported 16.1% of the time, the first time since at least 2017 that moving for employment was not cited more often, according to the report. 

U.S. Population Projected to Start to Decline in 2080

25 November 2023
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By Brett Rowland, The Center Square

The U.S. population is projected to reach a high of nearly 370 million in 2080 before falling back to 366 million in 2100, according to the latest projections from the U.S. Census Bureau. 

By 2100, the total U.S. resident population is projected to increase 9.7% from 2022. The Census Bureau projections provide possible scenarios of population change for the nation through the end of the century.

“In an ever-changing world, understanding population dynamics is crucial for shaping policies and planning resources,” said Sandra Johnson, a demographer at the Census Bureau.

The projections show slower growth than was previously expected.

“The U.S. has experienced notable shifts in the components of population change over the last five years,” she said. “Some of these, like the increases in mortality caused by the COVID-19 pandemic, are expected to be short-term while others, including the declines in fertility that have persisted for decades, are likely to continue into the future. Incorporating additional years of data on births, deaths and international migration into our projections process resulted in a slower pace of population growth through 2060 than was previously projected.”

The Census Bureau projections show possible paths of population change based on assumptions about births, deaths and migration.

The 2023 projections include a main series (also known as the middle series) considered the most likely outcome of four assumptions, and three alternative immigration scenarios that show how the population might change under high, low and zero immigration assumptions.

* By 2100, the total population in the middle series is projected to reach 366 million compared to the projection for the high-immigration scenario, which puts the population at 435 million. The population for the middle series increases to a peak at 370 million in 2080 and then begins to decline, dropping to 366 million in 2100. The high-immigration scenario increases every year and is projected to reach 435 million by 2100.

* The low-immigration scenario is projected to peak at around 346 million in 2043 and decline thereafter, dropping to 319 million in 2100.

* Though largely illustrative, the zero-immigration scenario projects that population declines would start in 2024 in the complete absence of foreign-born immigration. The population in this scenario is projected to be 226 million in 2100, roughly 107 million lower than the 2022 estimate.

Immigration is projected to be the main driver of population growth under three of the four scenarios. The zero-immigration scenario is the exception. The projections show reduced fertility and an aging population result in natural decrease – more deaths than births – in all scenarios. This happens in 2038 in the main series, 2033 in the zero-immigration scenario, 2036 in the low-immigration scenario and in 2042 in the high-immigration scenario.

Passenger Rail Group Gets $150,000 Grant

25 November 2023
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The group that is seeking funding to advance a plan to build a passenger rail service through southern Montana, The Big Sky Passenger Rail Authority (BSPRA), has been awarded a $150,000 grant to explore the feasibility of the project. The grant was awarded by  the Pacific Northwest Economic Region’s Regional Infrastructure Accelerator (PNWER) , a federal agency whose goal is to further high-performance rail across the region. This constitutes the largest planning grant received by BSPRA to-date.

U.S. Department of Transportation’s Build America Bureau awarded the Pacific NorthWest Economic Region (PNWER) a grant to continue advancing infrastructure development through the five-state Regional Infrastructure Accelerator for which it has oversight of Alaska, Montana, Idaho, Oregon, and Washington.

The public funds will finance the development of a feasibility and economic study. It will look for opportunities to “bundle” track improvement that could benefit passenger and freight rail service, and for possible development of transit near rail stations. 

It would analyze track from Sandpoint, ID, to Glendive, MT, along proposed Amtrak North Coast Hiawatha route to identify small to medium track improvement projects for enhanced freight and passenger rail service for rural communities and tribal nations.

Inflation Top Issue for Voters

25 November 2023
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The Center Square

Voters have their eyes on their bottom line ahead of the 2024 election. The Center Square Voters’ Voice Poll, conducted in conjunction with Noble Predictive Insights, found that 48% of registered voters picked inflation as the top issue from a list of 18. That was followed by illegal immigration (33%), crime/violence (28%) and economy/jobs (24%).