Tax policy news covering federal and state tax legislation, IRS rules, corporate and individual tax debates, and revenue and deduction changes.
The IRS announced a 3.2% inflation adjustment to federal income tax brackets for the 2027 tax year, with marginal rates unchanged at 10% to 37%. The highest bracket now applies to income over $661,376, while the standard deduction for single filers rises to $16,600.
Colorado voters approved Amendment 87, replacing the state's flat income tax with a progressive system raising rates on households earning over $500,000. The measure garnered 50.6% support and is projected to generate roughly $2 billion in additional annual revenue for K-12 education, health care, and early childhood programs. Gov.-elect Phil Weiser pledged to implement the overhaul despite previously opposing the measure.
The Seattle Times argues that Washington state's 'millionaires tax' faces its final legal hurdle in Klickitat County Superior Court after surviving voter repeal. The commentary contends that upholding the 9.9% levy on incomes over $1 million is critical for generating $3 billion annually to fund education and social services without cuts.
Global News explains Canada's Budget 2026 proposal to merge RRSPs and RRIFs into an "RRSP-for-life." The piece details how this administrative change eliminates the mandatory conversion at age 71, allowing retirement savings to continue with tax-deferred growth potentially until death.
British savers are pulling funds from pensions ahead of schedule to avoid new inheritance taxes on unspent defined-contribution accounts starting next April. St. James's Place reported a 17% quarterly increase in withdrawals, a trend analysts link directly to the impending tax policy change.
Mexico's Congress approved a tax reform limiting deductible expenses for large firms to 96.6 percent, explicitly excluding automotive dealerships from exemptions granted to fuel distributors. The Mexican Association of Automotive Distributors warns the policy threatens approximately 1,000 showrooms and 70,000 jobs as President Claudia Sheinbaum prepares to sign the legislation.
Japan's Lower House approved a measure reducing the food consumption tax from 8% to 1% for two years. The legislation includes income-linked cash payments starting in fiscal 2027 to offset costs, though all opposition parties voted against the bill due to concerns over funding and eligibility.
The federal government introduced a new Canada Growth Incentive exempting the first $15 million in capital gains for founders and investors selling private business shares. Finance Canada estimates the measure will cost $565 million in lost revenue through fiscal year 2030-31, excluding professional services and resource sectors.
Millions of student loan borrowers face federal tax liabilities as the exemption for forgiven debt expires on January 1, 2026. Protect Borrowers estimates 2 million to 3 million individuals could owe up to $12,000 in taxes on balances cleared through income-driven repayment plans.
The article advises investors to prioritize determining if Roth conversions are beneficial before calculating how much can be done under new 2027 tax brackets. It highlights that inflation adjustments to tax inputs create opportunities for optimizing retirement strategies and minimizing lifetime tax liability.