House passes stopgap spending measure. The House passed the measure to keep the government open through March 11. The bill now goes to the Senate.
White House urges parents to file their 1040s quickly to collect child tax credits. There is roughly $193 billion waiting for families eligible for remaining expanded child tax credit funds. In a virtual event yesterday, Vice President Kamala Harris, Treasury Secretary Janet Yellen, and White House senior adviser Gene Sperling encouraged people to file tax returns this year even if their incomes are so low they usually don’t do so. Families can check eligibility at childtaxcredit.gov. This year’s filing deadline is April 18.
Romney: A possible deal on the Child Tax Credit. The Utah Republican says he’s quietly been talking about a compromise with Democrats, including Sen. Joe Manchin. Romney, who has proposed his own payment to parents called the Family Security Act, told the American Enterprise Institute he’d be ”pretty flexible” on details. He said an agreement might limit the credit for higher-income people and finesse the controversy over whether parents must work to get a payment.
Don Lubick dies. The former Assistant Treasury Secretary for Tax Policy in both the Carter and Clinton administrations died yesterday at age 95. He first joined Treasury in 1961, the first year of the Kennedy Administration, and continued his public service through Barack Obama’s 2008 transition team. TPC holds an annual tax policy symposium in his honor.
Confirm the Fed nominees, 180 economists urge the Senate. A group including former Federal Reserve chair Ben Bernanke and former vice chair Alan Blinder urged lawmakers to confirm President Biden's five nominees to Federal Reserve positions. “The current slate of nominees would allow the Federal Reserve to vigorously pursue its dual mandate of full employment and price stability—a mission that has an immense impact on the lives of all Americans,” the group said.
Even with soaring revenues, states should be cautious cutting taxes. Tax cuts are tempting, but “this year’s large surpluses can quickly turn to shortfalls,” warns TPC’s Lucy Dadayan. She recommends policymakers consider the effects of inflation, changing consumer spending patterns, a turbulent stock market, a slowing rate of initial public offerings, and timing changes as taxpayers’ anticipated federal tax rate increases. All suggest that last year’s big revenue gains could be temporary.
Meanwhile: South Carolina lawmakers consider an income tax cut. The House Ways & Means Committee is considering a gradual 1 percentage point cut in the top 7 percent individual income tax rate over five years. After the first year’s 0.2 percent reduction, further cuts would occur only if growth in projected General Fund revenue exceeds 5 percent of the expenditure base. The Revenue and Fiscal Affairs Office estimates the plan would cost $800 million. South Carolina’s total state budget in fiscal year 2021-2022 is $31 billion.
The US cuts steel tariffs on Japan. The Biden Administration struck a deal to eliminate 25 percent steel tariffs on Japan as long as imports do not exceed historically-based volumes. The agreement takes effect on April 1. The US reached a comparable deal with the European Union three months ago, exempting imported steel products from a 25 percent tariff and aluminum from a 10 percent tariff, as long as imports remain below targets.
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