Trump proposes a coronavirus-related economic package. In an oval office speech last night, President Trump proposed low-interest loans to small businesses, payroll tax relief, and an unspecified plan to defer tax payments for “certain businesses and individuals.” He also proposed banning all travel to the US from Europe, except the United Kindom, for 30 days.
Maybe a Tax Day delay. Treasury Secretary Steven Mnuchin said earlier in the day that the package might include giving “virtually all Americans, other than the super rich” extra time to file their taxes without interest or penalty. He didn’t say how long tax season would be extended or exactly for whom. Mnuchin said the filing delay would serve as a $200 billion bridge loan and “create a very big stimulus.” However, people would need to pay the taxes due before the new deadline. He was unclear whether the extension would apply to all taxpayers, or only those diagnosed with COVID-19.
About that payroll tax cut…. Marketplace considered Trump’s idea of a payroll tax holiday to mitigate economic effects of the pandemic. The problem: It would benefit only people on payrolls. “People who are at most risk here economically are the people who would benefit the least,” said TPC’s Howard Gleckman, They include those who have been laid off or are on unpaid sick leave. Lawmakers of both parties have been cool to the idea.
House Democrats could vote today on a coronavirus relief package. On the day the World Health Organization declared the coronavirus a pandemic, Speaker Nancy Pelosi was putting the finishing touches on a Democratic response. It likely will include paid sick leave and enhanced unemployment insurance, as well as food assistance for students who lose free or reduced lunch if their public schools close due to the virus. While the measure will not include President Trump’s payroll tax cut, it is likely to get support from some Republicans in both the House and Senate. The House may vote on the package this week. House leaders said it would cost “billions” of dollars but did not release a formal price tag.
How not to respond to the coronavirus. TPC’s Howard Gleckman argues that targeted, industry-specific tax breaks would be a terrible response to the coronavirus pandemic. Why? “They are unworkable and unfair. And they almost certainly will turn into a money-wasting Christmas tree of goodies that will do little or nothing to protect the economy from a recession driven by fear of a disease.” Treasury boss Mnuchin insisted yesterday that special subsidies to these industries would not be a “bailout.”
The UK digital tax will take effect on April 1. Despite intense pressure from the Trump Administration, the government of Boris Johnson says its digital tax will take effect in just three weeks. The levy would apply mostly to large US tech firms such as Google and Facebook. Trump has threatened France and other European countries with tariffs in response.
In Jacksonville, Florida, will a sales tax for schools get a vote in November? Residents voiced their opinions this week on a possible November referendum for a half-cent sales tax in Duval County. Funds would pay for repairs to aging public schools. The tax would be in effect for 15 years and could generate $1.2 billion. The school district needs nearly $2 billion for improvements. The city council could vote in two weeks to put the measure on the November ballot. If it does, the school board will drop its lawsuit against the city for failing to put the tax on the ballot last year.
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