Too Much SALT? The Nuanced Impact of the State and Local Tax Deduction Cap on Pass-Through Business Taxpayers

Perhaps the most controversial provision of the Tax Cuts and Jobs Act of 2017 is the state and local tax deduction limitation (or SALT cap), partic¬ularly with respect to how the cap impacts pass-through entities in high-tax states. This particular provision of the tax law has been criticized by opponents as deliberately punitive to small businesses in blue states, while proponents maintain that eliminating the SALT cap would primar¬ily benefit high income taxpayers. Politicians from blue states have called for the repeal of the SALT cap, and some states have enacted various workarounds with questionable prospects of success. Still, many taxpay¬ers will not benefit from a SALT deduction irrespective of the SALT cap, particularly taxpayers that either take the standard deduction or are subject to the alternative minimum tax (AMT). We examine the developing law around the SALT cap and provide descriptive empirical evidence of its disparate impact on closely held business taxpayers. Consistent with prior economics literature, we find that the impact is indeed most pro¬nounced among high-income taxpayers in blue states. However, we note that the impact is substantially less than the furor over the limitation would suggest because many high-income taxpayers are subject to the AMT and so are not significantly affected by the limitation. These findings suggest two underemphasized points. First, the imposition of the SALT cap was not the drastic financial hit to blue state taxpayers that policy makers and commentators have suggested. Second, with a new adminis¬tration that favors eliminating the SALT cap, Congress could consider whether the repeal of the cap alone is enough because further changes would be needed to return the SALT deduction to its earlier prominence

Is It Time for Federal Regulation of the Tax Preparer Industry? New Insights from Legal and Empirical Developments

The tax preparer industry is unusual in that it involves the interpretation of an intricate and complicated tax code, but imposes no minimum requirements of competency because the industry is largely unregulated. A study by the Government Accountability Office (GAO) indicated that unregulated tax preparers commit significantly higher error rates and, based in part on that study’s findings, the Internal Revenue Service (IRS) attempted to regulate the tax preparer industry nationwide under the Registered Tax Return Preparer (RTRP) regime. This RTRP program was invalidated in Loving v. IRS, however, leaving the industry largely unregulated, except in the small minority of states that have enacted tax preparer regulations

The American Astronomical Society, find out more The Institute of Physics, find out more Where Do Quasar Hosts Lie with Respect to the Size–Mass Relation of Galaxies?

The evolution of the galaxy size–mass relation has been a puzzle for over a decade. High-redshift galaxies are significantly more compact than galaxies observed today at an equivalent mass, but how much of this apparent growth is driven by progenitor bias, minor mergers, secular processes, or feedback from active galactic nuclei (AGNs) is unclear. To help disentangle the physical mechanisms at work by addressing the latter, we study the size–Mstellar relation of 32 carefully selected broad-line AGN hosts at 1.2 \u3c z \u3c 1.7 (7.5 \u3c log MBH \u3c 8.5; Lbol/LEdd ≳ 0.1). Using the Hubble Space Telescope with multiband photometry and state-of-the-art modeling techniques, we measure half-light radii while accounting for uncertainties from subtracting bright central point sources. We find AGN hosts to have sizes ranging from ∼1 to 6 kpc at Mstellar ∼ (0.3–1) × 1011 M⊙. Thus, many hosts have intermediate sizes as compared to equal-mass star-forming and quiescent galaxies. While inconsistent with the idea that AGN feedback may induce an increase in galaxy sizes, this finding is consistent with hypotheses in which AGNs preferentially occur in systems with prior concentrated gas reservoirs, or are involved in a secular compaction processes perhaps responsible for building their bulges. If driven by minor mergers that do not grow central black holes as fast as they do bulge-like stellar structures, such a process would explain both the galaxy size–mass relation observed here and the evolution in the black hole–bulge mass relation described in a companion paper

The Mass Relations between Supermassive Black Holes and Their Host Galaxies at 1 \u3c z \u3c 2 with \u3cem\u3eHST\u3c/em\u3e-WFC3

Correlations between the mass of a supermassive black hole (SMBH) and the properties of its host galaxy (e.g., total stellar mass M*, luminosity Lhost) suggest an evolutionary connection. A powerful test of a coevolution scenario is to measure the relations –Lhost and –M* at high redshift and compare with local estimates. For this purpose, we acquired Hubble Space Telescope (HST) imaging with WFC3 of 32 X-ray-selected broad-line (type 1) active galactic nuclei at 1.2 \u3c z \u3c 1.7 in deep survey fields. By applying state-of-the-art tools to decompose the HST images including available ACS data, we measured the host galaxy luminosity and stellar mass along with other properties through the two-dimensional model fitting. The black hole mass () was determined using the broad Hα line, detected in the near-infrared with the Subaru Fiber Multi-Object Spectrograph, which potentially minimizes systematic effects using other indicators. We find that the observed ratio of to total M* is 2.7× larger at z ∼ 1.5 than in the local universe, while the scatter is equivalent between the two epochs. A nonevolving mass ratio is consistent with the data at the 2σ–3σ confidence level when accounting for selection effects (estimated using two independent and complementary methods) and their uncertainties. The relationship between and host galaxy total luminosity paints a similar picture. Therefore, our results cannot distinguish whether SMBHs and their total host stellar mass and luminosity proceed in lockstep or whether the growth of the former somewhat overshoots the latter, given the uncertainties. Based on a statistical estimate of the bulge-to-total mass fraction, the ratio /M*,bulge is offset from the local value by a factor of ∼7, which is significant even accounting for selection effects. Taken together, these observations are consistent with a scenario in which stellar mass is subsequently transferred from an angular momentum–supported component of the galaxy to a pressure-supported one through secular processes or minor mergers at a faster rate than mass accretion onto the SMBH

The Evolution of Active Galactic Nuclei in Clusters of Galaxies to Redshift 1.3

We have measured the luminous active galactic nucleus (AGN) population in a large sample of clusters of galaxies and find evidence for a substantial increase in the cluster AGN population from z ~ 0.05 to z ~ 1.3. The present sample now includes 32 clusters of galaxies, including 15 clusters above z = 0.4, which corresponds to a three-fold increase compared to our previous work at high redshift. At z < 0.4, we have obtained new observations of AGN candidates in six additional clusters and found no new luminous AGN in cluster members. Our total sample of 17 low-redshift clusters contains only two luminous AGNs, while at high redshifts there are 18 such AGNs, or an average of more than one per cluster. We have characterized the evolution of luminous X-ray AGNs as the fraction of galaxies with M_R < M*_R (z) + 1 that host AGNs with rest-frame, hard X-ray [2-10 keV] luminosities L_X,H ≥ 10^43 erg s^–1. The AGN fraction increases from fA = 0.134^+0.18 _–0.087 % at a median z = 0.19 to fA = 1.00^+0.29 _–0.23 % at a median z = 0.72. Our best estimate of the evolution is a factor of 8 increase to z = 1 and the statistical significance of the increase is 3.8σ. This dramatic evolution is qualitatively similar to the evolution of the star-forming galaxy population in clusters known as the Butcher-Oemler effect. We discuss the implications of this result for the coevolution of black holes and galaxies in clusters, the evolution of AGN feedback, searches for clusters with the Sunyaev-Zel'dovich effect, and the possible detection of environment-dependent downsizing

AGN STORM 2: V. Anomalous Behavior of the CIV Light Curve in Mrk 817

An intensive reverberation mapping campaign on the Seyfert 1 galaxy Mrk817 using the Cosmic Origins Spectrograph (COS) on the Hubble Space Telescope (HST) revealed significant variations in the response of the broad UV emission lines to fluctuations in the continuum emission. The response of the prominent UV emission lines changes over a $\sim$60-day duration, resulting in distinctly different time lags in the various segments of the light curve over the 14 months observing campaign. One-dimensional echo-mapping models fit these variations if a slowly varying background is included for each emission line. These variations are more evident in the CIV light curve, which is the line least affected by intrinsic absorption in Mrk817 and least blended with neighboring emission lines. We identify five temporal windows with distinct emission line response, and measure their corresponding time delays, which range from 2 to 13 days. These temporal windows are plausibly linked to changes in the UV and X-ray obscuration occurring during these same intervals. The shortest time lags occur during periods with diminishing obscuration, whereas the longest lags occur during periods with rising obscuration. We propose that the obscuring outflow shields the ultraviolet broad lines from the ionizing continuum. The resulting change in the spectral energy distribution of the ionizing continuum, as seen by clouds at a range of distances from the nucleus, is responsible for the changes in the line response.Comment: 20 pages, 8 figures, submitted to Ap

AGN STORM 2. I. First results: A Change in the Weather of Mrk 817

We present the first results from the ongoing, intensive, multiwavelength monitoring program of the luminous Seyfert 1 galaxy Mrk 817. While this active galactic nucleus was, in part, selected for its historically unobscured nature, we discovered that the X-ray spectrum is highly absorbed, and there are new blueshifted, broad, and narrow UV absorption lines, which suggest that a dust-free, ionized obscurer located at the inner broad-line region partially covers the central source. Despite the obscuration, we measure UV and optical continuum reverberation lags consistent with a centrally illuminated Shakura–Sunyaev thin accretion disk, and measure reverberation lags associated with the optical broad-line region, as expected. However, in the first 55 days of the campaign, when the obscuration was becoming most extreme, we observe a de-coupling of the UV continuum and the UV broad emission-line variability. The correlation recovered in the next 42 days of the campaign, as Mrk 817 entered a less obscured state. The short C IV and Lyα lags suggest that the accretion disk extends beyond the UV broad-line region. Unified

The Atacama Cosmology Telescope: A Measurement of the DR6 CMB Lensing Power Spectrum and its Implications for Structure Growth

We present new measurements of cosmic microwave background (CMB) lensing over $9400$ sq. deg. of the sky. These lensing measurements are derived from the Atacama Cosmology Telescope (ACT) Data Release 6 (DR6) CMB dataset, which consists of five seasons of ACT CMB temperature and polarization observations. We determine the amplitude of the CMB lensing power spectrum at $2.3\%$ precision ($43\sigma$ significance) using a novel pipeline that minimizes sensitivity to foregrounds and to noise properties. To ensure our results are robust, we analyze an extensive set of null tests, consistency tests, and systematic error estimates and employ a blinded analysis framework. The baseline spectrum is well fit by a lensing amplitude of $A_{\mathrm{lens}}=1.013\pm0.023$ relative to the Planck 2018 CMB power spectra best-fit $\Lambda$CDM model and $A_{\mathrm{lens}}=1.005\pm0.023$ relative to the $\text{ACT DR4} + \text{WMAP}$ best-fit model. From our lensing power spectrum measurement, we derive constraints on the parameter combination $S^{\mathrm{CMBL}}_8 \equiv \sigma_8 \left({\Omega_m}/{0.3}\right)^{0.25}$ of $S^{\mathrm{CMBL}}_8= 0.818\pm0.022$ from ACT DR6 CMB lensing alone and $S^{\mathrm{CMBL}}_8= 0.813\pm0.018$ when combining ACT DR6 and Planck NPIPE CMB lensing power spectra. These results are in excellent agreement with $\Lambda$CDM model constraints from Planck or $\text{ACT DR4} + \text{WMAP}$ CMB power spectrum measurements. Our lensing measurements from redshifts $z\sim0.5$--$5$ are thus fully consistent with $\Lambda$CDM structure growth predictions based on CMB anisotropies probing primarily $z\sim1100$. We find no evidence for a suppression of the amplitude of cosmic structure at low redshiftsComment: 45+21 pages, 50 figures. Prepared for submission to ApJ. Also see companion papers Madhavacheril et al and MacCrann et a