WHAT’S IT ALL MATTER? The Tax Court faces a number of complicated and sizable cases in a given year. Just in 2023, the court ruled against both Coca-Cola and 3M in cases that left both companies with fatter tax bills. Several weeks back, the D.C. Circuit reversed a Tax Court ruling — a rare event in and of itself — that would have made it far more difficult for the IRS to enforce certain penalties. Meanwhile, the court is facing no shortage of cases on hot-button issues like conservation easements and microcaptive insurance. The Tax Court currently faces a backlog, largely because of the coronavirus disruption, as Tax Notes recently pointed out. Still, the court has been able to stay afloat at least in part because of the assistance of senior judges who have pitched in after they retired or saw their terms expire. But one of the bigger questions hanging over the court is what will happen to its caseload now that the IRS is beefing up enforcement, following the influx of funding that Democrats gave the agency in their 2022 tax-and-climate law. WHY DO THEY THINK THAT? There’s an interesting question hanging out there: Why has the Biden administration taken such a dim view of a global wealth tax? After all, the president and his team (and some prominent congressional Democrats, for that matter) have had no qualms about pushing domestic taxes targeting the accumulated assets of the very well-to-do, at least in part because they see a political advantage in a tax-the-rich message. At the same time, Treasury Secretary Janet Yellen has spent a good portion of her term in office first negotiating and then trying to sell a global tax deal affecting large multinational corporations. So why wouldn’t the Biden administration be interested in essentially marrying those two ideas? Taking a step back: Brazil is the current president of the Group of 20 major economies, and has decided to use that perch to push the idea of a wealth tax essentially inspired by the minimum tax on multinationals that is known as Pillar Two of the current global tax deal. France, Germany and Spain are among the other countries to show an interest in that idea. But not Yellen, who said two weeks ago that the U.S. took issue with a plan that would redistribute the revenues gained from a global tax on the super-rich. Those comments drew pushback from progressive groups in the U.S., like Patriotic Millionaires, who basically wondered why this wouldn’t be right up the Biden administration’s alley. Patriotic Millionaires said they were heartened by Yellen’s later clarification on the topic, and noted that redistribution wasn’t part of the current proposal kicking around the G-20. Still, even within that clarification, Yellen said that she was “not supportive of an international negotiation that would involve all countries agreeing” to a wealth tax. Meanwhile, other tax experts argue that Pillar Two essentially redistributes revenues from American multinationals to other countries, and also are wondering why the administration’s taken such a different stance when it comes to the assets of wealthy individuals. “Yellen’s statement contradicts the repeated emphasis that members of the Biden administration — including Yellen herself — have placed on the importance of multilateralism to achieve fairness and equity in international taxation, and on the benefits that encouraging other countries to impose higher taxes would have for the American people,” Mindy Herzfeld of the University of Florida law school wrote at Tax Notes.
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