- August 12, 2020
- Posted by: detaxify
- Category: Tax Law
Employers aren’t all that keen on Trump’s payroll tax cut. The Wall Street Journal finds (paywall) that employers are cool to the president’s order that allows them to defer withholding Social Security payroll taxes from September 1 through December. Most won’t make final decisions until they see IRS guidance on how to turn Trump’s executive statement into action. “This is going to be a pretty big programming lift, technology lift for us to do,” said the director of compliance at Paychex Inc., which processes payrolls for 680,000 employers.
And the governors are a no-go on his unemployment insurance idea. The National Governors Association warns the president’s proposal to create a new federal bump in unemployment benefits—but only by $300 instead of the just-expired $600—would impose “significant administrative burdens and costs” on states. So far, only West Virginia has signed on to the plan.
How about a capital gains tax cut? President Trump says he’s seriously considering it, claiming it would create more jobs. Bloomberg reports that Trump continues to tease the idea of using an executive order to index capital gains to inflation. White House advisor Larry Kudlow has been promoting the idea for years, even though Bush Administration lawyers concluded that only Congress could take that step.
Or tax relief for families “suffering” from shutdowns? Senator Rand Paul introduced a bill last week to allow new above-the-line deductions for internet access, work-related child care expenses, and school expenses including technology. Teachers would be able to deduct more than the current maximum of $250 on qualified teaching expenses. Sen. Paul does not detail how these tax expenditures would be offset.
Tune in today: When state and local tax revenues are falling, what are the educational costs of the COVID-19 pandemic? State and local government leaders face a pivotal question: What will public education will look like in the coming year? Whether remote or face-to-face, the cost of each approach will be higher than expected while state and local revenues continue to fall. How will states and school districts weigh the costs of providing an adequate education and balance the trade-offs between in-class instruction and its health risks? Watch the conversation among Michael Hinojosa of the Dallas Independent School District, Robin Lake of the Center on Reinventing Public Education at the University of Washington, Kim Rueben, of TPC’s State and Local Finance Initiative, and Heidi Sipe, of the Umatilla School District. Georgetown University’s Nora Gordon will moderate the discussion, live here from 11:00 am to noon.
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 [email protected].