A combination of long-standing IRS operational deficiencies, the agency’s temporary closure due to the pandemic, and the now-expired pandemic relief produced a perfect recipe for a paper backlog.
Over the long run, tax policies that grow after-tax incomes and the economy do more to boost charitable giving than policies that try to incentivize people to be charitable.
Tax extenders this year can be split into three rough groups: expiring parts of the Tax Cuts and Jobs Act (TCJA), expiring parts of various COVID-19 economic relief packages, and the Island of Misfit Extenders.
While strong economic growth—fueled by higher levels of investment, productivity, and jobs—will lift after-tax incomes over time, policies that provide relief by immediately boosting after-tax incomes of lower-income households are also available. As lawmakers consider such policies, they should keep in mind the trade-offs among them.
