GOP previews its coronavirus relief package. Still negotiating with the White House over key details, Senate Majority Leader Mitch McConnell said the GOP plan would focus on jobs, health care, kids in school, and liability protections for schools and employers. He wants a $1 trillion bill that would include another round of Paycheck Protection Program loans, and reimbursement for business expenses for protective equipment, and testing. It likely also will include another round of stimulus checks, but targeted to lower-income people. The House has passed a $3 trillion version.
The White House continues to push for a payroll tax cut. McConnell said “We’ll be discussing it.” But President Trump keeps insisting on a payroll tax cut. He says, “It’s a tremendous saving, and I think it’s an incentive for companies to hire their workers back and to keep their workers.” The idea remains unpopular in Congress and many economists argue it won’t help many Americans during the pandemic, especially with more than one million-a-week losing their jobs.
Minibuses leave the garage. The Rules Committee will meet today to prepare the first big 2021 spending bill for House approval. The $259.5 billion package includes the departments of State, Agriculture, and Interior, as well as military construction. Next week, the House is expected to approve a second minibus—a $1.4 trillion plan to fund the rest of government, except for Congress itself.
Biden would raise taxes on high-income real estate investors to help fund his $775 billion childcare and eldercare plan. The presumptive Democratic presidential nominee released his plan for a “caring economy” that provides universal child care and supports family care for frail older adults. The plan would limit the ability of high-income investors to defer taxes on real estate sales when profits are reinvested in another property. It also would prevent investors from using real estate losses to lower their income taxes.
New York State Democratic lawmakers propose a “Make Billionaires Pay” plan. They want New York billionaires to pay $5.5 billion in new capital gains taxes. Revenue would support a new unemployment insurance fund for those affected by the COVID-19 pandemic.
How would loan paydowns affect reform of the home mortgage interest deduction? TPC revamped its model of the mortgage interest deduction to include taxpayer behavior such as selling assets to pay down a mortgage. TPC’s Chenxi Lu and Eric Toder explain that overall, if Congress scales back the mortgage interest deduction, some high-income taxpayers are likely to sell assets and pay down mortgages. As a result, Treasury would collect somewhat less revenue than if no paydowns occur.
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