US Supreme Court to hear Trump tax cases tomorrow. The high court will hear, telephonically, three consolidated cases involving access to President Trump’s personal and business financial records from before he was president. All consider a central question: Do the president or third parties have to turn over his personal and business records in response to demands by other branches of government. The president has argued he is immune from any investigations, even those involving actions from before his presidency. Trump v. Vance will decide whether the Manhattan District Attorney can access 10 years of the president’s financial papers and tax returns. Trump v. Mazars involves Congress’s request for business and financial records from Trump’s accountant. Trump v. Deutsche Bank considers whether Congress can demand financial records from the president’s creditors.
The House readies the next stimulus bill. But what next? This week in Congress may feature a $1 trillion-plus game of legislative chicken over the next coronavirus relief bill. House Democrats are preparing a massive bill centered around aid to state and local governments. The Senate Republican leadership wants to slow walk any bill. Trump, who in the past backed more stimulus, now says he is in “no hurry” for more relief, despite an unemployment rate approaching 20 percent. Some White House aides are said to be advocating for spending cuts.
Federal tax collections for April fell while spending jumped. The economic disruption caused by the coronavirus pandemic and the federal relief responses have hit the government’s bottom line. The Congressional Budget Office reports that April federal receipts fell by 55 percent compared to a year ago. Spending rose to $976 billion, more than two-and-a-half times the sum in April 2019. The April deficit hit $737 billion in April, compared with a surplus of $160 billion last year.
Will the federal income tax deadline shift again? NBC News reports that White House officials have been mulling whether to extend the current July 15 tax filing deadline to September 15 or even December 15. No decision has been made, and the deadline officially remains July 15.
Tax 101: You can’t “double-dip.” TPC’s Steve Rosenthal argues that Treasury Secretary Steven Mnuchin is correct. Legally, businesses that receive the hundreds of billions of tax-free dollars through the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Paycheck Protection Program (PPP) cannot deduct from their taxable income any expenses covered by those tax-free dollars. And as a matter of policy, it would be costly and perverse to allow businesses to double-dip, or deduct expenses that are reimbursed by the federal government. Steve explains why “overly generous relief rewards savvy, well-connected, businesses and crowds out relief for others, undercutting the effectiveness of Congress’ aid.”
Delaware’s property tax: Unconstitutional. A judge has ruled that the state’s three counties calculate properties with outdated property values. The values are so outdated, the judge wrote in his decision, that some taxpayers have an unfair discount and others pay too much, relative to their property’s actual worth. That violates the state’s constitutional requirement that property owners be taxed equally. The ruling could trigger major changes to Delaware property owners’ tax bills for the first time in decades. Ultimately, a court will likely need to decide how the property tax system changes.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at firstname.lastname@example.org.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
- © Urban Institute, Brookings Institution, and individual authors, 2020.