GOP COVID-19 relief effort has stalled. Senate Republicans dropped President Trump’s formerly must-have—a payroll tax cut—from their bill. But GOP lawmakers and the White House cannot agree on what they do want. They appear to agree on a new round of stimulus checks, more Paycheck Protection Program loans, employer tax credits to encourage worker retention, and support for safety protections. They also are looking to continue CARES Act expanded unemployment benefits but at something closer to $200 per week than the current $600. With those added jobless benefits due to expire in a week, some GOP leaders want to break up the bill into smaller pieces—an idea House Speaker Nancy Pelosi calls a non-starter.
Meanwhile, weekly job loss claims climbed to 1.4 million. The first increase since March will keep the pressure on Congress to act quickly. After hints in May and June that the pandemic-driven slowdown was moderating, the economy may be worsening as cases of COVID-19 continue to climb. Expanded jobless benefits enacted under the CARES Act expire on July 31.
Ways & Means Republicans offer their own tax agenda. Nobody listens when you are in the House minority, but Ways & Means Republicans released their own “pro-growth” economic agenda. It mostly includes tax breaks for research and domestic manufacturing and investment. It could be a framework for a 2021 initiative in the unlikely event the GOP wins control of the House in November.
Save the Date: Urban Institute Data Talk on how property tax changes shape communities. The online event on Thursday August 6 considers two case studies. One is the effect of gentrification and associated relief efforts in Philadelphia. The second is an effort in California to tax commercial and industrial properties based on fair market value, an attempt to avoid the Proposition 13 caps on residential properties. Speakers will be Lei Ding of the Federal Reserve Bank of Philadelphia the Urban Institute’s Sarah Strochak. Register here.
The Kingdom of Saudi Arabia may consider an income tax. With its economy shrinking by 6.8 percent, the Saudi government has already tripled its value-added tax, increased import fees, and canceled some benefits for government workers. The kingdom has traditionally been income tax-free for individuals since oil revenue supports numerous subsidies and benefits. But the slump in oil prices means even an income tax is on the table.
Adding tax fraud to a murder charge. Minnesota has charged the fired Minneapolis police officer who killed George Floyd with felony tax crimes for failing to report more than $460,000 in income going back to 2014. Derek Chauvin and his wife Kellie underreported income and in some years didn’t file tax returns at all.
Catch up with Lisa Cook on The Prescription. If you missed it yesterday, you can watch the Michigan State economist talk about racial equity and the COVID-19 economy here.
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