President Trump begins to acknowledge the seriousness of the pandemic. After weeks of downplaying the coronavirus, late yesterday afternoon the president conceded the US “may be” headed for a recession and that the pandemic may continue well into summer. Soon after, the stock market closed down nearly 13 percent, its second worst day in history. Lawmakers were still trying to agree on a House-passed safety net bill even as lawmakers talked up yet a third measure.
Will there be a third stimulus package? Lawmakers are considering a new package that could include some form of direct payments to individuals such as a tax rebate or payroll tax cut, small-business grants and loans, expanded unemployment insurance, and relief for the airlines and other hard-hit industries. The question is: Will the Senate try to add some of these ideas to the bill passed by the House last week, or will it approve the House measure as endorsed by Trump and begin work on a third bill? Senate Majority Leader Mitch McConnell says the next bill may be much bigger than the first two.
The Tax Cuts and Jobs Act makes it harder for businesses to manage losses during the pandemic. The Wall Street Journal reports (paywall) on the law’s limitation on the ability of firms to use current losses to offset past profits and claim quick tax refunds. The Tax Cuts and Jobs Act repealed those loss provisions to pay for a slice of the corporate income tax rate cut.
The Supreme Court postpones oral arguments, including the dispute over Trump’s financial records. The High Court announced its indefinite delay yesterday. Trump has challenged the ability of Congress and local law enforcement to subpoena his financial records. The last time the court postponed oral arguments was during the Spanish flu outbreak of 1918.
Will Maryland be the first state to tax internet ads? The state Senate may consider a bill to tax companies like Facebook and Google for revenue earned from digital ads. Opponents say that enforcement would be difficult and that the bill may violate federal statutes and the Constitution. The controversial bill may stall since the legislature now plans to adjourn on Wednesday due to the coronavirus pandemic.
Iowa considers a sales tax increase to support conservation. Gov. Kim Reynolds wants a one-cent sales tax increase to help fund conservation programs. A share of the money would meet requirements of a 2010 state constitutional amendment that creates a trust fund to support local conservation initiatives like long-term watershed planning and coordination. The account has never been funded, but the sales tax hike would deposit $15 million into the fund.
In Colorado: A town will stop collecting tobacco sales tax due to TABOR. On Jan. 1, New Castle started collecting $3.20 for every pack of cigarettes and a 40 percent sales tax on other tobacco and nicotine items including vaping products. But the tax may surpass a voter-approved $65,000 revenue threshold for 2020. Colorado’s Taxpayers Bill of Rights prohibits the state and local governments from raising taxes without voter approval. Next year, the town can collect more than $65,000.
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