The Senate gears up for the relief bill. Majority leader Chuck Schumer says the Senate will get started on the $1.9 trillion pandemic relief bill as soon as Wednesday. Because the amendment process is relatively open-ended, Senate consideration is likely to take several days—and nights. Democrats expect to get no Republican votes for the bill, which passed the House last week. Thus, they’ll need all Democrats to back the final version.
More tax reporting for gig workers. In a last-minute addition, the House-passed pandemic relief bill would dramatically increase the amount of tax reporting for gig workers, home hosts and the like. Currently, firms such as Airbnb and Uber must report to the IRS payments in excess of $20,000. The bill would require tax reporting on payments of $600 or more.
A wealth tax for ultra-millionaires? Sen. Elizabeth Warren and Reps. Pramila Jayapal and Brendan Boyle have introduced a 2 percent annual tax on the net worth of households and trusts between $50 million and $1 billion. Assets above $1 billion would be subject to an additional 1 percent tax. They estimate 100,000 households would pay the tax, which they say would raise around $3 trillion over a decade.
Fiddling with the advanceable Child Tax Credit. To satisfy concerns of the Senate parliamentarian, Senate Democrats are revising their plan to make regular CTC payments. The original bill proposed making the payments monthly or quarterly. The new version proposes they be made “periodically.” While the instruction would be less specific, Democrats still hope the IRS will distribute the credits monthly. It’s the Senate. Don’t ask.
Today on the Hill. The Senate Budget Committee will consider the nomination of Shalanda Young to be Deputy Director of the Office of Management and Budget. Young has been widely discussed as a candidate for OMB director, should the nomination of Neera Tanden fail.
Could better government have reduced the deaths and financial costs of the pandemic? TPC’s Gene Steuerle argues that the key to policy success—especially in a crisis—is having a “process where expertise, and not politics, drives the first draft of options for solution…. If policymakers had focused on effective first drafts… they might easily have saved 100,000 lives and $1 trillion.”
In Brooklyn, NY: A refundable tax credit. Brooklyn Borough President Eric Adams proposes a monthly tax credit for low-income New Yorkers. He calls it “NYC Advanced Income Deployment,” or NYC AID. He’d increase the city’s earned income tax credit from 5 percent to 60 percent for households earning $30,000 or less, and to 30 percent for those earning between $30,000 and $50,000 annually. Adams, who is running for mayor, estimates it would cost $1 billion a year, offset by government staff attrition and a “modest increase” to the city income tax on ultra-millionaires.
Run, don’t walk, to file your tax return. The rush to file tax returns continues. Of the 55 million returns filed in the first week after the Feb. 12 start of tax season, 35 million were individual 1040s. — more than twice the number in the first week of tax season last year. TPC’s Elaine Maag told CNBC that the fastest way to get a refund is to file your taxes as soon as possible. “There’s no benefit to waiting,” she said. Plus, filing early can protect against fraud, according to American Institute of CPA’s member Kelley Long.
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