President Trump finally signed pandemic relief and a spending bill, after letting unemployment benefits lapse. President Trump finally signed the spending and relief bill after putting the effort—and the economy—in jeopardy for a week. The $2.3 trillion bill provides $892 billion in coronavirus relief and $1.4 trillion in regular government appropriations. Cash payments of $600 to Americans will be delayed, as well as a $300 boost to weekly federal unemployment benefits, which lapsed on Saturday night. President Trump signed the package after getting the Senate to agree to "start the process" for a vote on a separate bill that would increase cash payments to $2,000.
The TaxVox Lump of Coal Award goes to … TPC’s Howard Gleckman reviews the ten worst tax policy ideas of what is arguably one of the worst years in recent history. The absolute worst? The failure of Congress and President Trump to agree on additional pandemic relief for nine months. Most of the rest are about the 2020 presidential campaign and pandemic relief. But three come from the states, courtesy of TPC’s Richard Auxier.
Florida’s general revenue in November exceeds estimates. Most of the state’s general revenue comes from sales tax and corporate income tax. The Florida legislature’s Office of Economic & Demographic Research reported last week that net revenues in November totaled $2.698 billion, 2.1 percent higher than the $2.642 billion collected in November 2019. Despite the increase in overall receipts, revenues in the tourism and hospitality-related industries dropped 20.3 percent compared to November 2019.
CBPP report: How might states preserve revenue during the pandemic? The Center on Budget and Policy Priorities’ Michael Mazerov writes that many states can preserve revenue if they “decouple” their state tax laws from certain federal CARES Act provisions. Because many states’ personal and corporate tax codes are linked to the federal code, their revenues will drop when Congress enacts tax cuts. Three provisions, in particular, suspended restrictions that the 2017 Tax Cuts and Jobs Act had placed on businesses’ (and business owners’) ability to use business losses to reduce their tax liability.
New Mexico’s top 3 percent of earners will pay a higher tax rate starting in 2021. The New Mexico Taxation and Revenue Department announced that individuals who earn more than $210,000 and married people filing jointly earning more than $315,000 annually will pay a 5.9-percent state income tax rate, an increase from their previous rate of 3.9 percent.
China will extend tariff exemptions on six US products for one more year. China exempted tariffs on six US chemical and oil products in December 2019. The exemption was to last through December 25, 2020. China will now exempt the products through December 25, 2021.
The Daily Deduction will post Mondays until Congress returns to full session.
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 [email protected].
