Will the next coronavirus relief bill contain new rebates? Republican lawmakers are beginning to question including rebate checks in the next stimulus bill. They’d supplement the $1200 checks given to Americans in the previous relief package. Senate Republicans say they’ll focus on expanding the Small Business Administration’s Paycheck Protection Program. Some Senate Republicans, such as Mitt Romney, also support aid to state and local governments and additional unemployment benefits. Others, including Majority Leader Mitch McConnell are resisting both ideas.
IRS says 159 million have received stimulus payments. In the past two months, the IRS has distributed more than 159 million Economic Impact Payments totaling almost $267 billion. About 120 million payments were made by direct deposit, 35 million by check, and 4 million through pre-paid debit cards. The IRS says those who have not filed a federal income tax return for 2018 or 2019 have until Oct 15 to request a payment.
But millions of Americans continue to wait for their first unemployment checks. State processing systems have been overwhelmed by the surge in jobless claims and it has taken months for them to clear backlogs. As many as a third of the 40 million applicants since March have not yet received benefits.
The House-passed HEROES Act would help fight the recession by expanding the EITC. TPC’s Elaine Maag shares the results of recent TPC analysis. She and her TPC colleague Donald Marron report that the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, would substantially increase the earned income tax credit for workers without children at home. Urban Institute research finds that such a change would target benefits to workers in many of the industries hit hardest by COVID-19, such as retail and hospitality.
Balancing school budgets and tax hikes in the middle of a pandemic. The Tax Hound considers state and local efforts to manage the challenge. A decade ago, some states and localities raised taxes to help fill budget shortfalls following—not during—the Great Recession. But they were able to delay tax hikes only because of rapid, effective federal aid. What happens if the federal government does not step up this time, and state and local governments ask voters to pay higher state and local taxes this year?
Tennessee state lawmakers would substitute a higher tax on tobacco products for the sales tax on food. Two Democratic lawmakers have proposed repealing the 4 percent sales tax on food and replacing it with an increased tax on cigarettes, from 3 cents per cigarette to 8.35 cents. They’d also increase the tax on other tobacco products from 6.6 percent to 17 percent of the wholesale price.
Tune in today at 1:30 PM for a TPC Webinar “The Prescription: Fiscal Policy for the COVID-19 Economy.” Jason Furman, former chair of President Obama’s Council of Economic Advisers and currently an economics professor at Harvard University’s Kennedy School, will be interviewed by TPC senior fellow Howard Gleckman. Register here for the Zoom convesation,
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