- December 2, 2020
- Posted by: detaxify
- Category: Tax Law
First, centrists toss in a proposal. Centrist senators including Democrats Joe Manchin and Mark Warner and Republicans Bill Cassidy, Mitt Romney, and Susan Collins crafted a $908 billion plan. lt would provide $300 in weekly federal unemployment benefits for four months, $160 billion for state and local governments, a temporary moratorium on some coronavirus-related lawsuits by workers and consumers, and new assistance for small businesses, schools, health care, transit, and student loans.
Senate Democratic leaders raise. Minority Leader Chuck Schumer and other top Democrats countered with $600 in additional federal jobless benefits for 26 weeks. Schumer and House Speaker Nancy Pelosi reportedly discussed a more detailed proposal with Senate GOP Leader Mitch McConnell.
McConnell checks. He countered with a plan to increase jobless aid for one month, create $328 billion in new business loans, protect firms from coronavirus-related liability, extend and expand the above-the-line tax deduction for charitable giving and allow a 100 percent deduction for business meals. It includes no funding for state and local governments and no new stimulus checks. The poker game continues.
Yellen and Powell call for pandemic relief. President-elect Biden’s choice to head the Treasury, Janet Yellen, called for an aggressive stimulus package as soon as possible. At the formal announcement of her selection, Yellen called the pandemic, “an American tragedy.” She said, “it is essential we move with urgency. Inaction will produce a self-reinforcing downturn causing yet more devastation.” Separately, Fed Chair Jerome Powell repeated his call for a substantial stimulus: “The risk of overdoing it is less than the risk of underdoing it,” he said.
But what about excise tax relief for brewers, winemakers, and distillers? More than 50 senators of both parties urged McConnell, Schumer, and Pelosi to take up bill to permanently cut excise taxes for producers of beer, wine and spirits. The Tax Cuts and Jobs Act temporarily reduced these taxes but they are due to rise again at the end of the month. Backers want the extension tacked on to a spending bill Congress must pass by end of next week.
Colorado offers sales tax relief to restaurants and bars. Governor Jared Polis signed an executive order that extends the November state sales tax payment deadline for Colorado restaurants and bars. The businesses can defer up to $2,000 in payments for 30 days without owing penalties or interest.
Canada plans a digital tax in 2022. The country’s finance department announced this week that it will levy a new tax on corporations providing digital services beginning in 2022. The levy would remain in place until the Organization for Economic Cooperation and Development (OECD) agrees on a common approach to digital taxation. It would raise about $2.6 billion over five years.
So does Indonesia. It may tax technology companies on the income they earn in Indonesia if the OECD does not reach a digital taxation agreement. Indonesia has been collecting a 10 percent value-added tax (VAT) on digital products and services provided by tech companies since the middle of this year. Indonesia says it would participate in a global tax regime once one is agreed upon, but absent a consensus, Indonesia will collect the taxes based on its own formula.
CBPP has a new president. Sharon Parrott will be the new president of the Center on Budget and Policy Priorities. Parrott, currently the organization’s Senior Vice President for Federal Policy and Program Development, will succeed Bob Greenstein, who founded the center in 1981.
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