Week in Insights: N.Y. Child Credit Boost Must Outlast Politics

New York Gov. Kathy Hochul’s (D) proposal to expand the state child credit seems like a win for families, on its face. But its framing and context invite closer scrutiny, especially when considering long-term effectiveness and lessons from the expired federal child tax credit expansion.

Hochul has presented the proposal as a response to today’s high cost of living, calling out prices of groceries and clothing. It’s being framed as a response to New York’s affordability crisis—a key issue in the wake of Republican gains in the state last year.

The problem is that framing the expansion as an affordability measure could signal that it’s a temporary fix by design, rather than a permanent change. Cost of living fluctuates as inflationary and deflationary pressures ebb and flow, making it unwise to connect policies that target systemic issues to the current economic weather.

For a cautionary tale on the hazards of making such policies temporary, see the federal child tax credit expansion undertaken during the pandemic. That expansion slashed child poverty rates but was allowed to expire, underscoring how quickly even the most effective policies can be rolled back absent enduring political will.

In addition to making the expansion permanent, New York state should deliver the credit via monthly payments rather than a single refund at the end of the year. This would convert a one-time financial boost into a reliable income stream, helping families cover recurring expenses.

While the state’s expanded credit proposal could reduce child poverty in the near term, its long-term impact depends on whether it evolves into a stable and consistent policy or constitutes a band-aid measure.

New Yorkers deserve lasting solutions to structural economic inequities. The expanded child tax should be part of a sustained commitment to child welfare. Otherwise, it risks becoming yet another well-meaning but fleeting policy lost to shifting political winds.

—Andrew Leahey

Welcome to the Week in Insights for Bloomberg Tax’s latest analysis and news commentary. This week, experts examined retroactive tax refunds, risks that questionable ERC claims pose to mergers and acquisitions, and more.

Insights

Hofstra professor Jack Castonguay says mid-tier accounting firms should take a page from the Big Four playbook to combat pipeline challenges.

RSM’s Brian Kirkell says Congress should allow full deduction of all US income taxes paid at the federal, state, and local levels.

EisnerAmper’s Josh Pittleman analyzes a Court of Claims decision, saying some expats may now qualify for up to 10 years of retroactive tax refunds.

Tax Foundation’s Sean Bray encourages a new tax mindset for the EU that prioritizes simplicity and transparency to support the bloc’s competitive posture.

Berkeley Research Group’s Jesse Morton and Joe Kody review the risks of questionable employee retention credit claims, saying that independent professionals can help taxpayers weigh their options.

Kroll’s Fabian Alfonso and Guilherme Nascimento and Pinheiro Neto Advogados’ Felipe Cerruti Balsimelli examine corporate restructuring under Brazil’s year-old transfer pricing laws, saying the evolving rules demand vigilance and adaptability from tax pros.

Embarc Advisors’ Justin DePardo offers tips for selling small businesses in 2025, noting that understanding a company’s valuation helps to set reasonable expectations going into a deal.

Latitude Legal’s Alex Su says acting against stereotypes, focusing on current organization, and acting naturally can help attorneys build a personal brand on social media.

Columnist Corner

Technically Speaking design by Jonathan Hurtarte/Bloomberg Tax

Pittsburgh’s tax on nonresident athletes and entertainers should be upheld by the Pennsylvania Supreme Court, as the fee illustrates that true tax uniformity differs from equal treatment of all taxpayers, Andrew Leahey says in his latest Technically Speaking column.

Rejecting the tax “would create a perverse incentive,” Andrew argues, adding that such a decision would effectively leave residents to subsidize nonresidents’ use of public venues and city resources. Read More

News Roundup

Treasury Finalizes Rules for Low-Income Bonus Energy Credit

The IRS and Treasury Department finalized rules Wednesday on bonus tax credits for clean energy projects in low-income communities. Read More

UN Set to Begin Tax Treaty Talks Amid Pushback From Rich Nations

The United Nations is set to begin talks on a new global tax treaty in 2025, with engagement from the US, UK and other developed countries far from certain. Read More

Trump’s Federal Workforce Threats Poised to Stall IRS Expansion

Promises by President-elect Donald Trump and his allies to eliminate telework, weaken civil-service protections for federal workers, and reverse funding increases for the IRS threaten to roll back the agency’s improvement in answering its phones and strip it of resources to find tax cheats. Read More

Georgia Watches as New Tax Court Starts Taking Shape in 2025

Georgia Gov. Brian Kemp will start the process this year to launch the state’s full-fledged tax court after voters approved a constitutional amendment last November allowing formation of the independent judicial body. Read More

Career Moves

The OECD’s former tax policy adviser Chris Miller joined Ernst & Young’s Asia-Pacific policy team as an associate partner.

Julia Ushakova-Stein and Niki Ford joined Baker McKenzie as partners in its tax practice in San Francisco and New York, respectively.

Elaine Mooney was promoted to tax partner at Arthur Cox.

Christine Harlow joined Proskauer as a partner in its tax practice in New York.

PJ Manchanda joined EisnerAmper as a tax partner in its private client services group.

Crescent Moran Chasteen and Rachel Faye Smith joined Morrison Foerster as partners and co-chairs of its executive compensation and benefits group in Boston.

Arti Batra joined Bodman PLC as a member in its high net worth practice group in Detroit.

Alexander Choinski joined Eversheds Sutherland as a partner in its global energy team in Houston.

Andrew Wright was named practice leader for Hodgson Russ’ state and local tax practice.

If you’re changing jobs or being promoted, send your submission to TaxMoves@bloombergindustry.com for consideration.