No state is immune from the pandemic’s economic fallout. TPC’s Richard Auxier finds that all 50 states are experiencing an economic and fiscal crisis unseen since the Great Depression. April unemployment rates ranged from 7.9 percent in Connecticut to 28.2 percent in Nevada. Warns Richard: “Given what we know about unemployment rates and state tax revenue, the budgetary fallout will be catastrophic. And it will play out over years, not months.”
That plain envelope from "Money Network Cardholder Services" may hold a $1,200 IRS debit card. Don’t toss it. The IRS is sending the last of its economic impact payments as prepaid debit cards. But they come in an envelope that looks a lot like junk mail. So people are throwing them out, then asking where their payment is. The IRS put out a press release trying to explain.
White House reviews Made in America tax deduction. Bloomberg Tax reports (paywall) that the White House is reviewing the final rules governing the foreign-derived intangible income deduction. The Tax Cuts and Jobs Act provision effectively reduced the tax rate on foreign-derived sales and service income from 21 percent to 13.125 percent in an attempt to encourage US corporations to export more goods and services, and locate more intangible assets in the United States.
Companies with international teleworkers may face some tax complications. Bloomberg Tax reports that people working from home in states or countries other than their regular workplaces could create new tax obligations on their employers. “Companies need to know where their employees are, how long they’ve been there, and which jurisdictions have said they’ll forgive unexpected cross-border tax liabilities during the pandemic. Without that information they risk compliance problems and unexpected tax bills.”
Portland, Oregon, voters remain okay with a gas tax. Voters extended the city’s 10-cent per gallon tax on local gasoline sales for another four years. They initially approved the tax four years ago. It has generated $77 million in revenue and the city estimates the renewed tax will generate $74.5 million through 2024. The city continues to have the highest local gas rate in the state.
European Union leaders propose an $825 billion rescue plan. The proposal would allow the EU to levy taxes on its own, separately from member states, and distribute funds as grants or loans to needy nations. If approved, it would give the EU major new tax and spending powers, similar to that of a federal state.
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- © Urban Institute, Brookings Institution, and individual authors, 2020.