IRS will delay the tax filing deadline. Under growing pressure from Congress, tax accountants, and others, the IRS and Treasury will delay tax filing season for a month—until May 17. Mike Crapo, the top Republican on the Senate Finance Committee, was the latest to call for delay. State tax administrators and online tax prep firms such Intuit wanted the IRS to stick to April 15 but the IRS already has a backlog of 24 million returns that have yet to be processed. IRS Commissioner Charles Rettig will clarify it all in testimony to the House Ways & Means Committee’s Oversight subcommittee today.
President Biden says he’ll get the votes for tax increases on higher-earning people. Biden told ABC News that "Anybody making more than $400,000 will see a small to a significant tax increase…If you make less than $400,000, you won't see one single penny in additional federal tax.” This repeats a promise he’s been making since early in his presidential campaign. Biden acknowledged he may not secure Republican support for such a measure, but he’s confident “he’ll get the Democratic votes for a tax increase."
Sanders and congressional Democrats urge tax increases for firms with high CEO pay. Bernie Sanders and some congressional Democrats want to raise taxes by 0.5 percentage points on private and public companies that pay their CEOs 50 times more than their median worker wage. The surtax rate would climb until it maxes out at 5 percent for firms with a CEO-to-worker pay ratio of 500 to one.
McConnell on tax increases for infrastructure: Nope. The Senate Minority Leader said Republicans won’t support revenue measures to fund an infrastructure bill. Democrats signal they’d back taxes on higher incomes, estates, and corporations, while many Senate Republicans want to eliminate taxes on high value estates.
And business groups would like another PPP extension. The Paycheck Protection Program expires March 31. Groups representing small businesses including those in retail, travel, and food service are pushing for an extension to the end of the May. The additional time would allow more adults to get vaccinated so more lockdown measures can be eased.
The IRS has distributed 90 million economic payments under the American Rescue Plan. The first batch of payments totaling $242 billion were largely sent by direct deposit. Treasury also mailed roughly 150,000 checks worth approximately $442 million.
Reminder: Join TPC’s The Prescription today. Our guest will be TPC’s own Elaine Maag, who will be explaining the ARP’s big changes to the Child Tax Credit and other refundable credits. Join us from Noon to 12:30. Register here.
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