Congress wrestles with a coronavirus bill. Late yesterday House Democrats were scrambling to cobble together a measure that could win bipartisan support. Their draft would increase funding for state unemployment insurance, food assistance for low-income children, and Medicaid. It also would guarantee free coronavirus testing and paid-leave for workers who lose jobs or hours due to the pandemic, House Republicans had initially expressed support for the measure but reversed course when the White House opposed it. The Senate, which had scheduled a recess for next week, will now stay in session to work through the bill, Majority Leader Mitch McConnell said.
The Federal Reserve Bank pumps cash into panicked financial markets. Today the central bank said it would pump new liquidity into the financial markets by buying $1.5 trillion in Treasury bonds and other financial assets. The Fed said it took the action “to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.” But neither the Fed move nor President Trump’s initiatives did much to settle equity markets that fell by nearly 10 percent yesterday.
More on that proposed payroll tax cut. The New York Times reviews the proposal, which remains a work in progress. The temporary tax cut would add nearly $1 trillion to the national debt by suspending Social Security payroll taxes through December 31. Some economists think it’s a good idea given the psychological costs of a pandemic response, but other economists argue that the plan is inefficient. Does it make sense to give people extra take-home pay (if they are even working) when there are supply shortages and quarantines?
Six reasons why President Trump’s tax filing delay won’t help in the pandemic economy. TPC’s Howard Gleckman explains that (1) It won’t help many taxpayers; (2) It would mostly assist those who need help the least; (3) It could create new tax payment problems for those struggling with cash flow; (4) It would be difficult to determine eligibility; (5) Any targeted filing extension could cause massive confusion; and (6) It won’t help the IRS.
California collected $1 billion in cannabis tax revenue in just over two years. Since legal cannabis sales began in 2018, California has generated $1.03 billion for programs like child care for low-income families, cannabis research, public safety, and cleaning up public lands harmed by illegal marijuana growers. But is the 15 percent excise tax rate too high? State officials initially predicted the tax would raise twice as much, about $1 billion a year.
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