A federal judge in Texas on Monday seemed likely to stop a Biden administration rule that would extend mandatory overtime pay to 4 million U.S. workers from taking effect, but was unsure whether he could block it nationwide or only in the Republican-led state.

U.S. District Judge Sean Jordan in Sherman, Texas, suggested during a hearing that the U.S. Department of Labor had flouted federal wage law by basing eligibility for overtime pay on salaried workers’ wages rather than their job duties.

The rule will require employers to pay overtime premiums to salaried workers who earn less than $1,128 per week, or about $58,600 per year, when they work more than 40 hours in a week. The current threshold, set in 2019, is about $35,500.

Federal law exempts workers with “executive, administrative, and professional” duties from receiving overtime pay, and the Labor Department has for decades used salary as one factor in deciding when that applies.

During Monday’s nearly 90-minute hearing, Judge Jordan suggested that the new rule raises the threshold so significantly that it renders workers’ duties irrelevant even though they are the primary focus of the law.

The Judge seemed less certain about whether he should block the rule nationwide or only bar the Labor Department from applying it to state employees in Texas, asking both sides for input on the issue. Jordan is also presiding over a challenge to the rule by business groups, and a small marketing firm is suing over the regulation in a different federal court in Texas.

Garrett Greene, a lawyer for Texas, urged Jordan to stop the rule from taking effect anywhere, saying a federal law that regulates agency rulemaking gives courts the power to do so.

Homes in Wisconsin are more unaffordable than ever, according to this month’s Wisconsin Realtors Association report. However, the report indicates home sales and prices rose last month compared to May 2023.

“This is a tough environment for buyers given the high mortgage rates and limited supply of available homes on the market,” WRA president/CEO Tom Larson said in a news release. “We have tracked Wisconsin’s affordability level since 2009, and unfortunately affordability hit its all-time low point in May. The good news is that supply has been improving since late last year, which has moderated the rate of price appreciation. Hopefully, mortgage rates also will moderate and help improve our affordability during the summer sales period.”

According to the report, May 2024 home sales were up 11% over the previous year. The median price of a home statewide was $315,500, up 6.9% over the past 12 months.

Inventories improved, with new listings up 4.7% compared to May 2023, and total listings up 5.4%.

May begins the traditional busiest time of year for home sales, with about 43% of closings taking place between May and August in a typical year.

In a long-awaited ruling, the United States Supreme Court affirmed the constitutionality of a mandatory repatriation tax introduced by the Tax Cuts and Jobs Act (TCJA).

In upholding the tax, Justice Brett Kavanaugh, writing for the majority stated, “The MRT — which attributes the realized and undistributed income of an American-controlled foreign corporation to the entity’s American shareholders, and then taxes the American shareholders on their portions of that income — does not exceed Congress’s constitutional authority.”

The 7-2 decision, issued June 20, was expected to have implications for the taxation of wealth in the U.S., not just for U.S. taxpayers with substantial ownership in certain foreign corporations. Justice Amy Coney Barrett wrote a concurring opinion, joined by Justice Samuel Alito. Justices Clarence Thomas and Neil Gorsuch dissented.

As Kiplinger reported, the case, Moore v. United States, centered on whether U.S. taxpayers with specified foreign holdings could be subject to a one-time tax on those investments. The plaintiffs, Charles and Kathleen Moore, owned a stake in an agricultural equipment company in India.

Despite not receiving dividends or income from their investment over the years, the Moore’s paid about $15,000 in taxes on earnings attributed to them as shareholders due to the mandatory repatriation tax (MRT).

• The couple later argued that the MRT was unconstitutional, contending that income must be realized to be taxable under the 16th Amendment, which grants Congress the power to impose a federal income tax.
• Their lawsuit challenged the TCJA’s provision that levied this one-time tax on U.S. taxpayers with significant ownership in certain foreign corporations.

The Supreme Court emphasized that its holding is a narrow one. As the news analysis site, SCOTUS blog, reported, the holding is limited to taxes levied on shareholders of an entity on undistributed income realized by that entity. That income has to be attributed to the shareholders when the entity hasn’t been taxed on the income.

In finding in favor of the government, the Court affirmed the Ninth Circuit Court of Appeals, which highlighted that the MRT was designed to close loopholes that allowed shareholders to evade taxes on offshore earnings. By upholding the tax, the Supreme Court essentially reinforced the government’s ability to tax foreign-held profits — at least in the circumstances described in this case.

As Kavanaugh wrote in the decision, “The Court’s longstanding precedents plainly establish that, when dealing with an entity’s undistributed income, Congress may either tax the entity or tax its shareholders or partners. Whichever method Congress chooses, this Court has held that the tax remains a tax on income.”

The Wisconsin Supreme Court will hear a challenge to Democratic Gov. Tony Evers’ partial veto that locked in a school funding increase for the next 400 years, the justices announced Monday.

The Wisconsin Manufacturers & Commerce Litigation Center filed a lawsuit in April arguing the governor exceeded his authority. The group asked the high court to strike down the veto without waiting for the case to go through lower courts.

The court issued an order Monday afternoon saying it would take the case. The justices didn’t elaborate beyond setting a briefing schedule.

At issue is a partial veto Evers made in the state budget in July 2023 that increased revenue public schools can raise per student by $325 annually until 2425. Evers took language that originally applied the $325 increase for the 2023-24 and 2024-25 school years and vetoed the “20” and the hyphen to make the end date 2425, more than four centuries from now.

Wisconsin governors, both Republican and Democratic, have long used the broad partial veto power to reshape the state budget. It’s an act of gamesmanship between the governor and Legislature, as lawmakers try to craft bills in a way that are largely immune from creative vetoes. The lawsuit contends that Evers exceeded his veto authority and his action was unconstitutional.

The nonpartisan Congressional Budget Office (CBO) on Tuesday released an update to its 10-year budget outlook that found the federal budget deficit will approach $2 trillion in the current fiscal year.

The CBO’s latest estimate projects the budget deficit will reach $1.9 trillion in fiscal 2024, which would be the third largest in U.S. history and $200 billion larger than last year’s deficit. The projected $1.9 trillion deficit would trail only the $3.1 trillion fiscal 2020 deficit and the $2.7 trillion fiscal 2021 deficit that were incurred during the peak of spending on pandemic-era relief programs.

Annual budget deficits are expected to surge in the years ahead, surpassing the $2 trillion threshold with a projected deficit of nearly $2.2 trillion in 2030. Deficits would continue to rise in the following years, topping $2.8 trillion in 2033 and 2034 in the CBO’s analysis.

Sales rose just 0.1% on the month according to a Commerce Department report Tuesday that is adjusted for seasonality but not inflation. However, the result was slightly better than the downwardly revised 0.2% decline in April. On a year-over-year basis, sales rose 2.3%.

The sales number was worse when excluding autos, with a decline of 0.1% against the estimate for a 0.2% increase.

Moderating gas prices helped hurt receipts at gas stations, which reported a 2.2% monthly decline. That was offset somewhat by a 2.8% increase at sports goods, music and book stores.

Online outlets reported a 0.8% increase, while bars and restaurants saw a 0.4% decline. Furniture and home furnishing stores also reported a 1.1% drop.

The U.S. Department of the Treasury and the IRS on Monday unveiled a plan to “close a major tax loophole” used by large, complex partnerships, which could raise more than an estimated $50 billion in tax revenue over the next 10 years.

The plan targets so-called “related party basis shifting,” where single businesses operating through different legal entities trade original purchase prices on assets to take more deductions or reduce future gains, according to the Treasury.

After a year of studying the basis-shifting issue, the agencies announced their intent to issue proposed regulations. They also released a revenue ruling on related-party partnership transactions involving basis shifting without “economic substance” for the parties or “substantial business purpose.”

Pass-through business filings with more than $10 million in assets increased 70% between 2010 and 2019, but the audit rate for these partnerships fell from 3.8% to 0.1% during that period, according to the Treasury.

Wisconsin’s tourism industry had a record-breaking $25 billion in economic impact in 2023, according to a new report from the state Department of Tourism.

It’s the second year in a row Wisconsin broke that record. In 2022, Wisconsin’s tourism industry had an economic impact of $23.7 billion, breaking the prior milestone of $22.2 billion in 2019.

A statement from the Wisconsin Department of Tourism said there’s approximately $34 million in the Wisconsin 2023-25 biennial budget being used to “raise Wisconsin’s profile across the country as a premier business, cultural, and recreational destination.”

“Wisconsin tourism powers the economy and strengthens the fabric of communities of all sizes,” Wisconsin Tourism Secretary Anne Sayers said in the statement. “The historic impact of tourism reached every corner of Wisconsin and, in doing so, sustained livelihoods for thousands of our friends and neighbors.”

The report said the tourism industry supported more than 178,000 jobs last year. All 72 Wisconsin counties experienced an increase in economic impact.

The Federal Reserve held interest rates steady Wednesday, while signaling it expects to be able to cut rates only once this year.

The decision and the rate cut projections came hours after the Labor Department reported a modest — but welcome — easing in the inflation rate last month.

The Fed has kept its benchmark interest rate at the highest level in over two decades since last July.

Fed policymakers still expect to cut rates later this year. But forecasts released at the end of their two-day meeting show on average, policymakers anticipate just one quarter-point rate cut by year’s end — down from the three rate cuts they were forecasting in March.

The Fed has been prevented from cutting rates more aggressively because inflation has proven to be more stubborn than expected. Policymakers want more evidence that inflation is falling back towards their target of 2% before they start lowering rates.

The latest cost-of-living report, also released Wednesday, offers some encouraging signs that inflation is moving in that direction.

Consumer prices in May were 3.3% higher than a year ago — a smaller annual increase than the previous month. The consumer price index was flat between April and May, as falling gasoline prices helped to offset rising rents and restaurant prices.

A liberal judge who previously represented Planned Parenthood in a case related to abortion access entered the race for Wisconsin Supreme Court on Monday, with majority control of the battleground state’s highest court on the line.

Dane County Circuit Judge Susan Crawford launched her campaign to succeed retiring liberal Justice Ann Walsh Bradley, citing her previous work for Planned Parenthood as the fight over a Wisconsin abortion ban is playing out in court.

Crawford joins conservative Waukesha County Circuit Judge Brad Schimel, a former Republican state attorney general, as the only announced candidates. If more than two candidates get in the race, a February 18, 2025 primary will take place. The winner in the April 1, 2025 election will be elected to a 10-year term.