President Biden: Open to income limits on new relief checks. Previous economic impact payments were available to individuals with incomes of up to $75,000 (or $150,000 for married couples). President Biden indicated that he “open to negotiate” income eligibility requirements for payments in a third coronavirus relief bill.
TPC analyzes two ways to do it. There are many ways to better target the relief payments and Howard Gleckman looks at two. Congress could reduce from $75,000 to $50,000 the income level where the payments begin to phase out. Or it could speed up the phase out rate once the threshold is reached. Either would better focus on households that need assistance and save some money, though a small fraction of Biden’s $1.9 trillion plan.
Biden appoints key Treasury officials. Long-time Ways & Mean staffer Aruna Kalyanam will be deputy assistant secretary for tax and budget at the office of legislative affairs, Obama Administration veteran Aditi Hardikar will be a senior adviser to the deputy secretary, and, as previously announced, TPC’s Mark Mazur will serve temporarily as deputy assistant secretary for tax policy.
GOP lawmakers: Opposed to rolling back any TCJA tax cuts. It is not at the top of the Biden Administration’s priorities, but reversing the tax cuts for people earning over $400,000 and raising the corporate tax rate could help finance the administration’s future spending priorities. The House Ways & Means Committee’s top Republican, Kevin Brady, says reversing such Tax Cuts and Jobs Act provisions during the pandemic-induced economic downturn would “have a significant impact in a bad way on our economy.”
NYU creates a new Tax Law Center. The NYU law school’s new initiative “will include technical input on tax legislation, comments on tax regulations, and intervening in tax litigation, with the goals of protecting and improving the integrity of the tax system, saving and raising revenues, and advancing equity.” The center’s founding faculty directors are Lily Batchelder and David Kamin (who just took a White House job). The executive director will be Chye-Ching Huang, the long-time director of economic policy at the Center on Budget and Policy Priorities.
Maine Gov. Janet Mills: Tax Paycheck Protection Program (PPP) funds as income. To address a potential $100 million revenue shortfall, she proposes that Maine not conform with federal law that allows businesses to exclude PPP loans from income and deduct PPP loan-related expenses when filing federal taxes.
Minnesota Gov. Walz would raise taxes on the state’s highest earners. GOP lawmakers say the proposal has no chance, but Walz wants to increase state income taxes on couples earning more than $1 million annually and raise taxes on capital gains and corporations. His $52.4 billion “COVID-19 Recovery Budget” also includes tax credits and direct payments to moderate- and low-income families affected most by the pandemic’s economic crisis.
Connecticut state Senate leader proposes a statewide property tax on high value property. Senate President Pro Term Martin Looney proposes a new statewide tax of one mil ($1 for every $1,000 of assessed value) on residential and commercial property. The first $300,000 of assessed value would be exempt. Connecticut assess property at 70 percent of market value, so the tax would target property assessed at $430,00 or more.
United Kingdom: Not planning to continue a sales tax cut for its hospitality industry. In July, UK Chancellor of the Exchequer Rishi Sunak cut the 20 percent value added tax (VAT) for hospitality and leisure down to 5 percent through Jan. 12, at a cost of $5.6 billion. Sunak said the government has no plans to extend the VAT reduction, which helped support over 150,000 businesses and 2.4 million jobs.
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