House Approves Bills Aimed At Strengthening The Credibility Of The IRS
April 16, 2015
House Passes Package Of Bills Aimed At Strengthening The Credibility Of The IRS; Fewer Housing Starts Than Expected In March; Japan Surpassed China in March To Once Again Become The Largest Holder Of U.S. Treasury Securities.
- The House of Representatives passed a package of bills on Wednesday aimed at strengthening the credibility of the Internal Revenue Service by increasing compliance standards for federal employees and improving those civilian workers’ accountability in paying their taxes. The Tax Deduction Fairness Act of 2015, Death Tax Repeal Act of 2015, and the Bureau of Consumer Financial Protection Advisory Boards Act of 2015 passed the House with some bipartisan support. The combined pieces of legislation prevent individuals with serious delinquency in paying their taxes from becoming or remaining as federal employees, and they add accountability for current employees who willfully fail to file federal taxes or understate the amount they have due. Currently, about 4% of federal employees have unresolved federal tax issues that total $1.1 billion in uncollected revenues due to the IRS. House Oversight and Government Reform Committee ranking member Elijah Cummings (D-MD) noted that the tax compliance rate for federal employees is much higher than the 91% compliance rate for the general public. The House has scheduled additional votes for tax policies in coming weeks. [WaPo]
Economic Indicators & News
- There were fewer housing starts than expected in March, as the annual rate for construction reached 926,000 units, below the anticipated pace of 1.04 million units last month. By region, the amount of new residential construction increased by the most in the Northeast followed by the Midwest at gains of 114.9% and 31.3%, respectively, while the number of housing starts declined by 3.5% in the South and 19.3% in the West. Amid improving weather conditions, low interest rates, and a stronger job market, the continued sluggish rate of growth in the housing industry raises questions of underlying growth in the sector. [Census]
- New jobless claims remained below 300,000 in the April 11 week as 294,000 Americans filed for unemployment benefits. Continuing claims fell 40,000 to a 15-year low of 2.268 million, as the unemployment rate for insured workers remained unchanged at 1.7%. The four-week moving average for initial claims rose marginally to 282,750. [Labor]
- Japan surpassed China in March to once again become the largest official holder of U.S. Treasury securities. A falling yen exchange rate has attracted more dollars into the country to stabilize its declining value. Japan’s holdings of U.S. government debt has increased to $1.224 trillion while China’s position has decreased from $1.273 trillion a year ago to $1.223 trillion last month. The U.S. Federal Reserve still remains the single biggest holder of Treasuries at $2.5 trillion. Meanwhile, private international investors increased their position in American debt from $5.89 trillion in 2014 to $6.21 trillion this year. Overall, the rising value of the dollar and stable economic conditions in the U.S. have led to greater inflows of foreign capital. [FT]