The Supreme Court just rejected an effort to block student debt relief. We’ll also look at how the IRS is changing tax brackets to adjust to inflation and a breakthrough housing discrimination lawsuit.
🥬 But first, see why everyone is talking about lettuce.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Barrett denies bid to block debt forgiveness plan
Justice Amy Coney Barrett on Thursday denied an emergency bid by a group of Wisconsin taxpayers to block the Biden administration’s student loan forgiveness program.
Barrett, who handles emergency matters arising from Wisconsin, acted alone in denying the request, rather than refer the matter to the full court.
- The brief, one-line order comes after the Brown County Taxpayers Association on Wednesday urged the court to rule that the president’s nationwide debt cancellation plan illegally encroaches on Congress’s exclusive spending power.
- The move leaves intact a judge’s finding that the group lacked standing to sue, a ruling that is being appealed in a lower court.
The emergency bid came after a A U.S. District judge in Wisconsin dismissed the suit for lack of standing. But the challenge remains alive in an appeals court.
The Hill’s John Kruzel reports here.
TAX CHANGES
What to know about the IRS’s changes to next year’s taxes
The IRS announced on Tuesday inflation adjustments for more than 60 tax provisions for tax year 2023, including the standard tax deduction and the designation of tax brackets, both of which affect the vast majority of taxpayers.
These tax adjustments happen every year, but since inflation is at a nearly 40-year high of 8.2 percent, next year’s adjustments will be particularly noticeable.
Here are just a few things to know about the inflation adjustments for 2023 taxes:
- The changes allow taxpayers to break even: Just like the Social Security cost-of-living adjustment (COLA), which will provide an extra $140 a month to recipients on average, the extra money resulting from the tax code adjustments really isn’t extra money.
- Adjustments prevent “bracket creep”: If marginal tax rates were left alone each year, experts say that inflation, which the Federal Reserve tries to keep around 2 percent in normal conditions, would cause people’s taxes to increase unfairly in what the Beltway set terms “bracket creep.”
- Not every tax credit will be revised upward: While the refundable portion of the child tax credit, which has been hailed as one of the most significant poverty reducers in U.S. tax policy, is being adjusted upward for inflation by 6.67 percent, the maximum credit of $2,000 will stay the same.
The Hill’s Tobias Burns has more here.
HISTORIC CASE
DC settles historic case against rental companies accused of housing discrimination
Three real estate companies and their executives will pay landmark fees for discriminating against renters who use housing vouchers, authorities announced Thursday.
The $10 million penalty settling a lawsuit filed against DARO Management Services, DARO Realty and Infinity Real Estate is the largest in a housing discrimination case in U.S. history, Washington, D.C., Attorney General Karl Racine told reporters.
- Racine said investigators uncovered “mountains of evidence” showing DARO violated civil rights and consumer protection laws, discriminating against housing voucher holders by refusing to accept certain subsidies, charging voucher users extra fees and posting discriminatory ads, and using different application standards for those with vouchers in its 15 buildings.
- He drew historical parallels to the case, noting that those who practice discriminatory housing policies reinforce Jim Crow-era racism as most D.C. residents who use housing vouchers are Black. About 11,500 families in the nation’s capital rely on housing vouchers.
The Hill’s Adam Barnes has more here.
BIG MONEY
Top firms raked in record profits lobbying to influence CHIPS Act, IRA
Several of Washington’s top lobbying firms reported record-breaking earnings in the third quarter of 2022, according to figures shared with The Hill, defying expectations that lobbying revenue peaked earlier this year.
Hired guns worked overtime to influence the Inflation Reduction Act and the CHIPS and Science Act, both of which became law in August. They’re now turning their attention to government agencies that control the flow of billions of dollars in lucrative new grants authorized by the bills.
- Lobbying doesn’t end after a key bill is signed into law — corporations lean on lobbyists who previously worked in federal agencies to understand the process and introduce them to government decision makers.
- Holland & Knight, for example, which boosted its year-over-year earnings by
21 percent, helped seven companies receive a combined $865 million from the Department of Energy to produce electric vehicle batteries in the U.S.
Karl has the details here.
Good to Know
Home sales fell for the eighth consecutive month in September as surging interest rates continue to cool the previously hot market, according to data released Thursday by the National Association of Realtors (NAR).
Existing home sales declined by 1.5 percent from August to a seasonally adjusted annual rate of 4.71 million units. Meanwhile, year-over-year sales dropped by
23.8 percent.
Here’s what else we have our eye on:
- Uber users can expect to start seeing more ads while digitally hailing rides, ordering food or even while en route to their destination.
- Google users will be able to choose if they want to see more or fewer ads based on specific categories and decide what personal data is used to target ads to them, the tech giant announced Thursday.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.