Thorny issues remain unresolved in the relief package. Congressional leaders appear to have agreed on a framework for a $900 billion+ pandemic relief bill but are still haggling over details. The package is expected to include relief checks of roughly $600, weekly federal unemployment benefits of $300, about $325 billion for small businesses, and money for transportation, vaccine distribution and schools. But the last-minute deal-making and vote counting could require another very brief continuing resolution to keep the government open after tonight. The biggest sticking points: Should aid go to states and local governments and a last-minute effort by Republicans to constrain future emergency lending by Treasury and the Federal Reserve.
Senators urge the IRS to offer late filing and late payment relief to tax filers. A bipartisan group of 14 senators asked IRS Commissioner Charles Rettig and Treasury Secretary Steven Mnuchin to ease burdens on taxpayers. They want a first-time tax abatement program and a dedicated telephone line for taxpayers to request coronavirus-related penalty relief. And they urged the IRS to stop correspondence audits until it gets through its mail backlog. Doing so could "limit taxpayer confusion and reduce unnecessary correspondence with the IRS."
Will New York State lawmakers raise taxes on the wealthy? The Wall Street Journal reports (paywall) that New York may raise top income tax rates, perhaps retroactively, on households with $1 million or $2 million in annual income. Revenue would avoid $8 billion in education and social service cuts. Lawmakers had authorized the funding in the spring, but it was contingent on additional federal funding that never came.
Will Illinois raise taxes? In November, Illinois’ voters rejected Governor J. B. Pritzker’s graduated income tax proposal. This week he proposed $700 million in budget cuts. House Speaker Mike Madigan says he wants to find a “balance between cost savings and new revenues,” opening the door to a tax increase…. Or at least talking about one.
How extending the EITC could help post-secondary students. A new TPC brief compares two aid policies for undergraduate and graduate students. Researchers show that making students eligible for an Earned Income Tax Credit would place an equal value on going to school and working, and provide students with an important source of aid.
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