A faster phase-out for pandemic relief payments. Bowing to concerns from moderate Senate Democrats, President Biden has agreed to more quickly phase-out eligibility for those $1,400 relief payments. Full payments still would go to individuals with Adjusted Gross Income of $75,000 annually and couples earning $150,000. But individuals making more than $80,000 annually and couples earning more than $160,000 would now lose the benefit. Roughly 8 million fewer households would get the payments than under the House bill.
Extending California’s EITC would help 146,000 lower-income independent students. TPC’s Elaine Maag and Nikhita Airi estimate that if California extends its maximum Earned Income Tax Credit to students who are independent for tax purposes, including those with no earnings, it would deliver $46 million in additional benefits each year to 146,000 students. That’s 11 percent of all independent students.
GAO: IRS paid $3.03 billion in interest on delayed refunds in 2020. In 2019, the IRS paid $2.06 billion, so why the extra payments? The IRS says it was because the 2020 tax deadline was delayed from April 15 to July 15 due to the pandemic. The pandemic does not, however, explain why IRS interest payments on late refunds have been climbing since 2017, or why it took so long to make pay refunds to those who filed well before July 15. The Government Accountability Office attributes much of the delay to IRS reliance on paper-based communication between taxpayers and the agency.
Nomination watch. The Senate overwhelmingly confirmed Cecilia Rouse as chair of the White House Council of Economic Advisers. She was dean of the Princeton School of Public and International Affairs. Like so many Biden appointees, Rouse is a White House veteran. She served as an economic adviser to presidents Clinton and Obama. She’ll be the first Black CEA chair.
A fiscal time bomb ticks away in US cities. The New York Times takes a deeper look at the impact of falling commercial property values. Offices, malls, restaurants, and the like were shuttered much of last year due to the pandemic. Empty buildings mean lower property tax revenues, which can comprise 30 percent or more of municipal government revenues. Local officials of both political parties are urging Congress to approve relief for local governments.
Should Big Tech pay a tax on the data we give it? The Tax Hound considers the question raised in the documentary, The Social Dilemma. It might feel like the right way to tax an industry enjoying skyrocketing profits thanks to its use of our personal data, but there’s a far more obvious and simpler solution.
As for that data that helps build an individual’s wealth… If the Ultra-Millionaire Tax Act proposed by Sen. Elizabeth Warren were to become law, Amazon founder Jeff Bezos would have to pay over $5 billion in 2020 in federal taxes. Bill Gates would have to pay $3.6 billion, and Mark Zuckerberg would owe $3 billion.
Tune in today for the Prescription. TPC’s Howard Gleckman will talk with Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, about the pandemic relief proposals being debated in Congress and overall US economic policy. Register here for the noon-time online event.
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