The Trump administration and congressional Republicans are mothballing efforts by the IRS to eliminate tax shelters used by large corporations and the ultra wealthy to skirt their tax obligations. Closing the tax shelters had been projected to generate more than $100 billion in revenue over the next decade. The New York Times’ Jesse Drucker reports:
In April, the I.R.S. said it would rescind Biden administration rules that had required companies using such tax strategies to report them to the agency, a change making it more difficult for auditors to find the transactions. The agency also eased a pair of rules that target abusive shelters, including one that imposes penalties on wealthy Americans who used an insurance tax scheme that multiple courts have tossed out. In late July, 20 House Republicans asked the I.R.S. to withdraw yet another line of attack on the transactions, one providing guidance to auditors on how to analyze the tax shelter deals.
Drucker explains how these complicated schemes work:
Companies that buy expensive equipment often take gradual tax deductions equal to the cost, because of something called “depreciation.” Federal tax rules permit those deductions because, in theory, the equipment becomes less valuable each year. …Those deductions in turn shield profits from tax. If a company spends, say, $1 billion on steel pipes to line its oil wells, it could deduct nearly $150 million annually for seven years. But at a certain point, the deductions run out, which may mean the profits generated by the oil wells are no longer sheltered from tax. The basis shifting transactions targeted by the I.R.S. effectively create a whole new series of deductions from thin air, permitting the companies to start sheltering the profits from tax all over again — without spending any new money.
No oversight for pregnancy centers
Gov. Jeff Landry’s administration has failed to comply with a state law that requires oversight of taxpayer dollars spent at controversial crisis pregnancy centers. That’s the conclusion of a new report from the Louisiana Legislative Auditor. Crisis pregnancy centers are part of an unregulated industry that counsels women against abortion and promotes abstinence-only approach to sex education. The Louisiana Illuminator’s Julie O’Donoghue reports:
The Louisiana Department of Children and Family Services did not monitor how state dollars were spent at pregnancy centers, create regulations for how they can use that money or track whether the centers met the goals of their state contracts, according to a report the Louisiana Legislative Auditor’s Office released Monday. Those benchmarks were expected to be met under a 2024 state law to establish the Pregnancy and Baby Care Initiative, which replaced a similar state program called Alternatives to Abortion.
Louisiana spent $1.2 million on the pregnancy centers from August 2024 to July 2025 and appears ready to dole out more money:
The Landry administration intends to give the pregnancy centers more money this year. It has raised the annual cap for funding per center $249,999 in the current budget cycle, in spite of the auditor’s concerns about transparency. As of June, there were 38 pregnancy centers operating in Louisiana based on numbers in the audit report.
Paid leave for Minnesota
In 2023, Minnesota passed a law that guarantees most workers can take paid leave from their jobs to care for a newborn or to recover from a serious illness. The new program starts in 2026 and will be financed by a new 0.7% payroll tax. Governing’s Jared Brey reports:
The new law applies to most full- and part-time workers in Minnesota who earn at least $3,700 in a year. Workers can take up to 12 weeks of family leave in a year to care for a new child or other family member, and another 12 weeks medical leave to care for themselves, with a max of 20 weeks in a single benefit year. They’ll receive up to 90 percent of their weekly wages, with the maximum benefit capped at the state’s average weekly wage, $1,372.
Brey explains how the Minnesota Department of Employment and Economic Development has built out a sprawling administrative apparatus:
So far, it employs around 240 full-time equivalent positions, plus additional vendors and dedicated positions within Minnesota IT Services. It’s currently hiring about 25 people a week, and expecting a full roster of just over 350 staff by the time the program begins. … In addition to all the hiring, the state has conducted in-depth public outreach to try to ease employers (and employees) through the transition. Norfleet was hired in the fall of 2023, just a few months after the bill creating the paid leave program passed the state Legislature.
Student test scores reach historic lows
Math and reading scores for U.S. 12th graders plummeted to historic lows last year, according to the National Assessment of Educational Progress. The scores on the “nation’s report card” showed that 45% of high school seniors scored below basic in math and nearly one-third were below basic in reading. The Washington Post’s Laura Meckler reports:
The declines were underway before the onset of the coronavirus pandemic, which broadly disrupted education, and scores have continued to fall. Policymakers had hoped there would be signs of recovery by 2024, when these tests were administered. Instead, the results were the latest indication of the pervasive challenges facing American schools and students. Average scores fell to their lowest levels since the current versions of these tests were first administered in both math and reading, as did scores for the lowest-performing students. Only students at the very top showed stable results.
Number of the Day
911,000 – Number of fewer jobs that U.S. employers created from April 2024 through March 2025 than initial reports. (Source: Bureau of Labor Statistics)