Pandemic relief talks plod on. A bipartisan group in Congress has shared details about its relief plan. A new summary released yesterday includes an extension of unemployment insurance programs scheduled to expire Dec. 31 and a $300 weekly plussed-up federal benefit. It also includes more detail of a revamped Paycheck Protection Program: It would allow firms to apply for second round if they have no more than 300 employees and sustained a revenue loss of 30 percent in any quarter of 2020. Local chambers of commerce also would be eligible for loans, and more types of PPP loan-related expenses would be covered and forgiven.
The sticking points. A compromise seems to be hung up on three issues: Whether to include a new round of stimulus payments, those increased unemployment benefits, and liability protection for firms that are sued by workers whose customers contract COVID-19. But the real issue sems to be the deep divisions within the Senate GOP. Will Majority Leader Mitch McConnell greenlight a bill that would pass with support of nearly all Democrats but a minority of Republicans?
Buying time. While lawmakers haggle over details of the relief bill, the House passed a one week extension of a continuing funding resolution to keep the government running through Dec. 18. The Senate may consider it today. The measure is likely to be the vehicle for any pandemic relief bill. Congress, of course, is likely to take all of the extra week to fight over stimulus.
SCOTUS remains silent on President Trump’s tax return case. The president’s attorneys have been trying to block New York prosecutors from obtaining them. His legal team asked the Supreme Court to reverse lower court rulings that would force his accounting firm to turn his tax returns and other financial information over to New York investigators who are examining potential tax and insurance fraud. But absent a deadline, the case may remain unresolved until after Trump leaves office on Jan. 20, which always seemed the president’s goal.
Seattle Chamber of Commerce sues over JumpStart tax. The chamber has asked the King County Superior Court to declare the city’s new tax on high-earning employees of large Seattle-based companies “illegal, invalid, and unenforceable.” The chamber also alleges the tax puts the city’s economic recovery at risk. The tax takes effect in 2021 and could generate an estimated $200 million in revenue. Businesses with at least $7 million in annual payroll will be taxed at rates of between 0.7 percent to 2.4 percent on annual salaries and wages in excess of $150,000. The top rate will apply to salaries of at least $400,000 at companies with at least $1 billion in annual payroll. Stock grants will be taxable, but not stock options.
Could a renters’ tax credit increase racial and economic equity? Urban Institute researchers Daniel Teles and Christopher Davis think so. They conclude that tax credits for low- and middle-income households could present an avenue for bipartisan compromise. "Although federal tax rates are progressive, current tax policy also benefits homeowners who are wealthier, have higher incomes, and are disproportionally White. Almost any tax policy that tips the scales back toward renters, including renter credits, would increase economic and racial equity.”
Tune in today at noon for The Prescription with San Francisco Treasurer José Cisneros. He and TPC’s Howard Gleckman will discuss how the economic downturn has affected San Francisco and how policymakers can assist its residents. Register and tune in here.
In case you missed it: A Look at President-Elect Biden’s Tax Agenda. A recording of Tuesday’s online event is available here.
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].
