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TaxBuzz Top 5 - Trump, Speaker Johnson Reject Millionaire Tax Hike, CA Social Media Ad Tax Gains Steam & More

TaxBuzz Top 5 - Trump, Speaker Johnson Reject Millionaire Tax Hike, CA Social Media Ad Tax Gains Steam & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Trump and GOP Leadership Reject Millionaire Tax Hike Amid Internal Party Debate

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Credit: Kevin Dietsch/Getty Images News

President Donald Trump and House Speaker Mike Johnson have firmly dismissed proposals to raise taxes on Americans earning over $1 million annually, despite some within the Republican Party advocating for such measures to fund the administration's expansive policy agenda. The idea of increasing the top marginal income tax rate from 37% to 39.6% or even 40% had been floated by figures like Vice President JD Vance and former strategist Steve Bannon, aiming to appeal to working-class voters and counter Democratic critiques of GOP tax policies favoring the wealthy. ​

However, Trump labeled the proposed tax hike as "very disruptive." The Wall Street Journal notes that he expressed concerns it could prompt wealthy individuals to relocate abroad, thereby reducing government revenue. He stated, "A lot of the millionaires would leave the country. You'd lose a lot of money if you do that." ​

Speaker Johnson echoed this sentiment, emphasizing the Republican Party's traditional opposition to tax increases. He remarked, "We have been working against that idea. I'm not in favor of raising the tax rates because our party is the group that stands against that traditionally." ​

The rejection of the millionaire tax hike underscores the ideological divide within the GOP, as the party grapples with balancing its longstanding tax-cutting principles against emerging populist pressures advocating for increased taxation on the ultra-wealthy to fund broader policy initiatives. ​

As the debate continues, the Republican leadership remains focused on advancing President Trump's fiscal agenda, which includes extending the 2017 tax cuts, enhancing border security, and increasing defense spending, all while seeking alternative funding mechanisms that align with traditional conservative fiscal policies.​

2. California Advances Digital Ad Tax Targeting Social Media Giants

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Credit: Xavier Lorenzo /Moment

California lawmakers are advancing legislation to impose a tax on digital advertising revenue generated by major social media platforms operating within the state. The proposed measure aims to levy taxes on companies like Facebook, Instagram, and TikTok, with the intent of addressing concerns over the influence of social media on public discourse and mental health. ​

Proponents argue that the tax would hold social media companies accountable for their role in disseminating harmful content and contributing to societal issues. The revenue generated is expected to fund initiatives aimed at mitigating the negative impacts of social media, particularly among youth. ​

Critics, however, contend that the tax could stifle innovation and lead to increased costs for consumers and advertisers. They also raise concerns about the potential for legal challenges, citing previous court rulings that have struck down similar state-level taxes on digital advertising as unconstitutional. ​

As the bill progresses through the state legislature, it reflects a growing trend among states to explore new regulatory and fiscal approaches to managing the influence of large tech companies. The outcome of this legislative effort could set a precedent for how states address the complex interplay between digital platforms, public policy, and taxation.​

3. Texas Launches Emergency Supplies Sales Tax Holiday Ahead of Storm Season

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Credit: Dzurag- iStock/Getty Images Plus

Texans can take advantage of the state's annual Emergency Preparation Supplies Sales Tax Holiday from Saturday, April 26, through Monday, April 28. During this period, residents can purchase a variety of emergency-related items without paying state or local sales tax, whether shopping in-store, online, or by phone.

Qualifying items include:​

  • Portable generators priced under $3,000​
  • Emergency ladders and hurricane shutters under $300
  • Essential supplies under $75, such as flashlights, batteries, first aid kits, fire extinguishers, smoke detectors, weather radios, tarps, and mobile phone chargers 

In a press release issued by the Texas Department of Emergency Management, Governor Greg Abbott shared the importance of preparedness, stating, "Having emergency supplies on-hand is one of the best ways Texans can keep themselves and their loved ones safe during emergency weather events." ​

The Texas Comptroller's Office estimates that shoppers will save approximately $2.3 million in state and local sales taxes during this tax holiday. 

It's important to note that certain items do not qualify for the tax exemption, including face masks, cleaning supplies, gloves, camping gear, chainsaws, and repair parts. Additionally, delivery and shipping charges are considered part of the item's total price; if these charges push the item's cost above the qualifying threshold, the entire purchase becomes taxable. 

With hurricane season commencing on June 1, state officials encourage residents to use this opportunity to assemble or update their emergency kits. For a comprehensive list of eligible items and further details, visit the Texas Comptroller’s website.

4. White House Denies Plans to Revoke Environmental Groups' Tax-Exempt Status

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Credit: Djavan Rodriguez/Moment

Amid swirling rumors and heightened concerns within environmental circles, the White House has clarified that it is not drafting or considering any executive orders to revoke the tax-exempt status of nonprofit environmental organizations. This statement comes in response to speculation that President Donald Trump might target green groups, particularly around Earth Day, following his recent suggestion that Harvard University should lose its tax-exempt status after defying administration directives. ​

According to Politico's E&E News ,White House official stated, "No such orders are being drafted or considered at this time." This assurance aims to quell fears among environmental nonprofits that their 501(c)(3) status, which allows for tax-deductible donations, might be at risk—a change that could significantly impact their fundraising efforts. 

Legal experts and advocacy groups, including the ACLU and Public Citizen, have been preparing for potential executive actions that could affect nonprofit organizations. They emphasize that the president lacks unilateral authority to alter tax-exempt designations and that any such moves would likely face legal challenges. ​

While the administration has denied intentions to target environmental groups' tax statuses, it continues to scrutinize nonprofit activities more broadly. For instance, President Trump is reportedly considering an executive order to prohibit 501(c)(3) organizations from distributing grant money overseas, a move that could impact major philanthropic foundations and humanitarian groups. ​

As the situation evolves, environmental organizations remain vigilant, prepared to defend their tax-exempt status and continue their advocacy work amidst a complex political landscape.​

5. U.S. Family Farms Face Looming Estate Tax 'Cliff' as Exemption Set to Expire

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Credit: Katrina Wittkamp/DigitalVision

The American Farm Bureau Federation (AFBF) is sounding the alarm over an impending "estate tax cliff" that could significantly impact family-owned farms across the United States. Unless Congress acts, the current estate tax exemption—set at approximately $14 million per individual under the 2017 Tax Cuts and Jobs Act—will revert to its pre-2017 level of around $5.5 million, adjusted for inflation, on January 1, 2026. This change would subject a larger number of farms to estate taxes upon the owner's death, potentially forcing heirs to sell portions of their land to cover tax liabilities. ​

AFBF President Zippy Duvall discussed the cultural and economic significance of family farms, stating, "For many people, their farms are not just their businesses, but they are a family tradition passed down from generation to generation. If a family is forced to sell off its farm piece by piece just to pay estate taxes, they run the risk of eventually losing the farm altogether." ​

The concern is exacerbated by rising agricultural land values, which have increased by over 37% since 2017. This appreciation means that even moderately sized farms could exceed the lower exemption threshold, making them susceptible to estate taxes. Given that over 80% of a typical farm's assets are tied up in non-liquid assets like land and equipment, paying estate taxes without selling parts of the farm becomes a significant challenge. 

The AFBF is urging Congress to make the current estate tax exemption permanent to provide certainty and protect the continuity of family farming operations. Without legislative action, the reduced exemption could lead to increased consolidation in the agricultural sector, as families unable to meet tax obligations may be forced to sell their farms.

Which headline this week most interests you?

Feature Image Credit: Win McNamee/Getty Images News

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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