August job growth slowed as federal coronavirus relief waned. The Labor Department announced Friday that employers added a strong1.4 million jobs last month, but it was a smaller gain compared to the previous three months. The Paycheck Protection Program ended in August, the federal $600 weekly boost to unemployment benefits expired in July, and few states adopted President Trump’s $300-a-week replacement.
“More stimulus” needed, but when and how much? Treasury Secretary Steven Mnuchin told Fox News that the Administration supports “more stimulus,” especially for small businesses. Yet Congress and the White House remain stymied on a new relief bill. The House passed a $3 trillion stimulus last spring but the Senate has not yet acted on any version. House Speaker Nancy Pelosi says Democrats would be willing to come down to about $2.5 trillion but White House chief of staff Mark Meadows says his maximum top-line number is $1.3 trillion.
A new sticking point. The Washington Post reports that the GOP is battling internally over whether to include in its package a $5 billion federal income tax credit to subsidize private school tuition. Education Secretary Betsy DeVos and Texas senator Ted Cruz want it in. Other GOP senators oppose the idea.
No government shutdown, at least? Mnuchin and Pelosi struck an informal agreement to try to craft a short-term stopgap measure to keep the US government funded and open after September 30. A continuing resolution to maintain funding would exclude controversial provisions, including coronavirus relief.
Would Joe Biden raise taxes on low- and moderate-income families? The Democratic presidential candidate emphatically says “no,” but President Trump says “yes.” TPC’s Howard Gleckman explains that both Biden and Trump are right, but Biden is more right than Trump. On average, low- and middle-income households are unlikely to pay more in individual income taxes and payroll taxes under his proposals than under current law. And some would pay less. But low- and moderate-income households would on average see some decline in their after-tax incomes from their share of corporate tax increases. They’d receive lower pay and smaller returns on their investments.
How does a tax incentive to conserve land turn into an abusive tax shelter? The Tax Hound considers the Senate Finance Committee’s damning report on syndicated conservation easements. Said one attorney of those transactions: “How do you justify paying less than $3 million for a property that an appraiser says is worth $81 million, with a conservation easement worth $78 million?” If you’re a wealthy investor taking shady advice from a promoter, you don’t justify it. You just shelter as much of your income as possible from taxes.
Federal appeals court to Manhattan District Attorney: You must wait at least another month for Trump’s tax returns. The court ruled last week it would temporarily block DA Cyrus Vance’s grand jury subpoena while it considers Trump’s argument that the subpoena is “wildly overbroad” and politically motivated. The court has scheduled oral arguments for September 25.
Who will pay Europe’s digital taxes? Firms such as Amazon, Apple, and Google say they will pass on to developers and others the costs of any European digital services taxes. Several nations, including the United Kingdom, France, and Italy are levying “digital service taxes” on gross revenue earned in their countries by these tech companies.
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