House plans to vote today on HEROES Act. As 3 million more Americans filed for unemployment benefits this week, the House is set to vote on the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The final details still are evolving, but the bill will include substantial aid for state and local governments, individuals, and small businesses. President Trump has said it would be “dead on arrival,” though there appears to be growing GOP support for state and local assistance.
TPC analyzes five ways to replace the SALT deduction cap. TPC’s Frank Sammartino explains that the HEROES Act’s temporary repeal of the $10,000 cap on federal deductions of state and local income taxes would add about $76 billion to the federal budget deficit in 2020 and largely benefit high-income households. TPC analyzed the revenue, distributional, and incentive effects of five ways to fund repeal. Four would impose broad limits on itemized deductions. The fifth would raise individual income tax rates for the four highest tax brackets. The options all would shift at least some of the tax burden from residents in higher-tax states to those in lower-tax states, generally by moving the burden from one group of high-income taxpayers to another.
Next Thursday: Webinar on “Responding to Income Shifting by Multinational Corporations.” TPC and the University of North Carolina Tax Center will host a live webinar on May 21 from 9:30 am to 12:00 pm. Experts in accounting, law, and economics will talk about how profit shifting lowers US taxes paid by multinational companies, the effectiveness of efforts to reduce base erosion, how best to assign profits, how the Organization for Economic and Cooperative Development might proceed on these issues, and how COVID-19 might affect multinationals’ activities. Register for the Zoom webinar here.
TPC’s Janet Holtzblatt receives NTA’s Davie-Davis Public Service Award. Before joining TPC, Janet spent more than 30 years at the Congressional Budget Office, the Treasury Dept., and the Senate Budget Committee. Her research has focused on the impact of taxes on families and workers and health reform as well as tax administration and tax simplification. The National Tax Assn. award recognizes NTA members who have served the public through insightful analyses and objective advice on tax and government finance. It honors the memories of two highly- respected tax policy experts, Bruce Davie and Al Davis. .. Congratulations Janet!
In Germany: Tax revenues are likely to decline sharply. The country’s tax collections may drop by $88.4 billion this year because of the pandemic, the first decline since the 2008 financial crisis. Finance Minister Olaf Scholz says the government will propose a stimulus package in early June.
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