Stimulus Stalemate

Taxes

Still no agreement on Stimulus 3. Senate Republicans and Democrats argued over who was responsible for their inability to pass a coronavirus stimulus package. House Speaker Nancy Pelosi released her own 1,400-plus page bill called the “Take Responsibility for Workers and Families Act.” Her measure includes a bigger individual payment, as well as expansions to the Earned Income Tax Credit and the Child Tax credit. It also would add more strings on assistance to corporations, and a long Democratic wish list of proposals including climate change and clean water programs.  

The Senate’s much-improved individual payment provision. On Friday, Majority Leader Mitch McConnell proposed recovery rebates that would have reduced payments for low-income households who needed it the most. The latest version, proposed Sunday, is much more targeted towards low- and moderate-income households than the earlier version, according to a new TPC analysis. Most senators of both parties appear to like the new plan. If only they could agree on the rest of the bill….

Keeping track of the changing state tax deadlines. Forbes’s Kelly Phillips Erb is keeping up with the latest in how each state is adjusting filing season in response to the coronavirus pandemic. So you don’t have to. 

In Italy: A 50 percent tax credit for infection control  expenses. The nation’s government offers the 50 percent credit for expenses related to daily cleaning services, masks, and other precautions that help curb the spread of the coronavirus. The credits are worth up to $22,000 a year.  

The Federal Reserve: “Whatever it takes.” The central bank announced yesterday an unlimited expansion of its bond purchasing programs. The effort to backstop the US economy is bigger than  during  the 2008-2009 financial crisis. It comes in the wake of American households and businesses sharply slowing economic activity as they try to stop the spread of the  coronavirus. The Fed said it will purchase Treasury and mortgage-backed securities “in the amounts needed to support smooth market functioning.”

New Jersey’s tax collections were strong, and now… not so much. Other states may soon face the same. Just weeks ago, Gov. Phil Murphy declared tax revenues were doing very well, giving the state leeway to prepay $280 million into the state’s employee pension plan. Now, nothing is clear. Pew Charitable Trust’s Josh Goodman called New Jersey the least prepared state to weather a crisis like the pandemic because of its relatively small cash reserves and  long term pattern of outspending  revenues. 

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at dailydeduction@taxpolicycenter.org.

Leave a Reply

Your email address will not be published. Required fields are marked *