House Democrats release the HEROES Act. House Democrats introduced their $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, their opening bid for the next COVID-19relief bill. Many of the provisions seemed more intended to satisfy Democratic constituencies and build public support for a new round of assistance than to actually become law. For now, Senate Republicans don’t seem to be in much of a rush to do anything. The White House has sent mixed signals on some key provisions. Still, the bill has plenty for individuals, employers and state and local governments. The House could vote on the plan as soon as Friday.
For individuals: It would provide another relief payment of $1,200 for every adult and $2,400 for married couples. Households would also receive an additional $1,200 for each of up to three dependents. The bill would expand the earned income tax credit, the child tax credit, and child and dependent care tax credit for 2020. It also eliminates—for 2020 and 2021—the $10,000 cap on state and local tax deductions. It expands the current deduction for teacher expenses, and creates new tax deductions for certain expenses of first-responders and front-line workers.
For employers: The HEROES Act would increase the employee retention tax credit and allow businesses hurt by the pandemic to apply for a new refundable credit for fixed expenses. The self-employed who have lost income would get a new refundable tax credit. Expenses paid with Paycheck Protection Program funds would also be tax deductible. The measure would tighten tax rules on businesses’ net operating losses.
And for state and local governments. Nearly $1 trillion of HEROES Act funding would support state and local governments, territorial and tribal governments, and the District of Columbia. TPC’s Tracy Gordon suggests three ways that Congress should design it. Aid should be fast, built on programs that already exist. It should be flexible, allowing states to direct funds to where they’re most needed. And it should be formula-driven, or tied to local economic conditions.
The Senate is headed in a different direction… Majority Leader Mitch McConnell and Sen. John Cornyn are working on a bill to expand liability protections for businesses that reopen during the coronavirus pandemic. McConnell insists, “To be clear now, we're not talking about immunity from lawsuits. There will be accountability for actual gross negligence and intentional misconduct. That will continue.”
SCOTUS may send the Trump tax cases back to the lower courts, handing the president a big victory. The US Supreme Court heard arguments yesterday in three cases involving President Trump’s efforts to keep private his income tax returns and financial records. The Washington Post reports that based on the questions, a majority of justices may want to send the cases back to lower courts for more work. That effectively would delay a final decision on the fate of Trump’s tax returns until well after the November elections. The High Court is expected to rule on the three consolidated cases this summer.
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