Republicans release details of their scale-down pandemic relief plan. It includes $160 billion for pandemic response, $132 billion in extended unemployment benefits, and additional $1,000 direct relief payments, phasing out starting at $40,000 for singles and $80,000 for joint filers. The whole package costs an estimated $618 billion—one third the size of President Biden’s plan.
Talking pandemic relief. Last night, Biden and ten GOP senators met to discuss options for the pandemic-relief package. One Republican, Maine’s Susan Collins, called it a “frank and very useful discussion” but said no deal was reached. At the same time, Senate Majority Leader Chuck Schumer and Speaker Nancy Pelosi filed a joint budget resolution as their first step to advancing Biden’s $1.9 trillion plan.
West Virginia Gov. Justice on pandemic relief: Go Bigger. Republican Gov. Jim Justice told The Washington Post: “You may very well leave some money on the table by going bigger but in this situation it will be the only way that we can turn our economy around and get our people righted up.” Home state enthusiasm for a big relief bill could encourage swing-vote Democratic Senator Joe Manchin to back Biden’s plan, or something close to it.
CBO: The economy will recover, but restoring jobs will take longer. The Congressional Budget Office released its Economic Outlook yesterday. It projects December’s COVID-19 relief package will boost the economy by 1.5 percent in both 2021 and 2022, with most of the acceleration occurring in the current quarter. CBO projects the unemployment rate will average 5.7 percent in 2021 and 4.1 percent between 2026 and 2031. The pre-pandemic 2019 unemployment rate was 3.7 percent.
Kim Clausing named Deputy Assistant Treasury Secretary for Tax Analysis. Clausing is an expert in international tax, especially corporate tax avoidance. She recently joined the faculty at UCLA law school after many years as an economics professor at Reed College. She’s the author of Open: The Progressive Case for Free Trade, Immigration, and Global Capital.
House members urge IRS to expand tax credit outreach to low-income communities. More than 50 lawmakers urged Treasury Secretary Janet Yellen and the IRS to do more to make non-filers aware of the Earned Income Tax Credit and the Child Tax Credit. The letter was signed mostly by Democrats.
With trading frenzies for GameStop and silver is a financial transaction tax more attractive? The House Financial Services Committee and the Senate Banking Committee plan hearings to investigate the practices of online trading platforms. There’s also an uptick in interest in a financial transaction tax. Rep. Ro Khanna of California suggested that “this shows the need for a financial transaction tax on hedge fund shorting and SEC regulations on short-selling practices.”
The Justice Department wants to shut down a Louisiana tax prep firm. The department alleges that two people and their business The Taxman Financial Services LLC prepared tax returns that claimed fabricated business expenses and false tax deduction and credits, including charitable contributions and education credits. They underreported customers’ tax liabilities, obtained fraudulent refunds, and charged exorbitant fees, often unbeknownst to their customers. They filed over 12,400 returns since 2017, sometimes using other tax preparers’ identifying information.
EU appeals Apple tax ruling. The European Union wants to overturn a lower EU court ruling over $15.7 billion in taxes that favors Apple. The court ruled in July that Apple’s Irish units were not liable for the tax payments, but the EU says the court not only used “contradictory reasoning,” but also improperly conflated Apple’s lack of employees at two Irish units and the company’s level of responsibility for intellectual property on iPhone and iPad sales across Europe.
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