What will happen to the next stimulus bill in an election year? The Wall Street Journal describes the dilemma facing Senate Republicans (paywall). Some prefer to join Democrats and quickly pass another bill to boost the economy before the November elections. Others want to wait and see if the economy improves on its own. Said Sen. Richard Shelby (R-AL) “What’s a few weeks when there’s been a lot of money pumped out there?” President Trump and many White House officials say they support another stimulus bill, but Republicans have not yet agreed on what it should include.
Small businesses and low-income households still are struggling. A project by Opportunity Insights is using a mix of public and private data to track the effects of policy responses to the COVID-19 economy. Data mostly from April and May found CARES Act Paycheck Protection Program (PPP) loans “had little impact on employment rates at small businesses to date…. Providing liquidity itself may be inadequate to restore employment at small businesses, at least in the short run.”
SBA and Treasury will disclose PPP loan recipients. The Small Business Administration and Treasury will disclose the names of businesses that borrowed money from the PPP. They’ll disclose data on businesses that received loans greater than $150,000. The Administration had resisted disclosing the names for months.
Congress may battle over using the timing of business tax benefits to support businesses. TPC’s Howard Gleckman lays out elements of what might be a fascinating fight in the next round of economic relief. The CARES Act allows firms to use recent year net operating losses (NOLSs) to claim refunds for taxes they paid as far back as seven years ago. Democrats want to roll back that provision, while some GOP lawmakers want to double-down on the idea of timing changes by letting businesses claim tax credits in 2020 that they otherwise would not be able to take until future years.
The IRS will beef up some audits of high-income taxpayers. Douglas O’Donnell, who leads the Large Business and International Division, said last week that the IRS will audit “several hundred” high-income filers with pass-through income from partnerships and the like. The goal: to see how these taxpayers are responding to the generous tax breaks created by the 2017 Tax Cuts and Jobs Act. The IRS has been under pressure for its very low audit rate of high-income households.
On the Hill this week. The House Ways & Means Subcommittee on Worker and Family Support will hold a hearing tomorrow on how the pandemic is affecting child care. The panel’s Health Subcommittee holds a hearing Thursday on the impact of COVID-19 on nursing home residents. On Wednesday, the Senate Budget Committee will hold a nomination hearing on Derek Kan to be deputy director of the White House Office of Management and Budget.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
