As U.S. businesses struggle to recover from the economic downturn, Congress and the White House continue to debate a phase four relief package, which could include anything from incentives for domestic travel and a payroll taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. cut to more fundamental reforms like enacting permanent full cost recoveryCost recovery is the ability of businesses to recover (deduct) the costs of their investments. It plays an important role in defining a business’ tax base and can impact investment decisions. When businesses cannot fully deduct capital expenditures, they spend less on capital, which reduces worker’s productivity and wages. .
Meanwhile, states continue to grapple with revenue shortfalls driven by extended shutdowns. While many states are waiting to see whether they’ll receive more federal aid, many are also exploring novel tax ideas to bring in more revenue.
Watch a special two-part Talking Tax Reform webinar, below, for insights from today’s leading tax policy experts on what is ahead at both the federal and state levels.
Panel 1: Liquidity and Recovery: Federal Aid to Businesses (11:00 a.m. – noon ET)
- Should restoring liquidity to struggling businesses and ensuring a strong economic recovery be mutually exclusive goals? Are there ways for federal legislators to address both at once?
- Why are net operating loss deductions an essential tool for ensuring liquidity and how can lawmakers further build on the CARES Act in this regard?
- What’s the best way to design unemployment relief to provide support to those in need without jeopardizing future employment?
- Karl Smith, Vice President for Federal Tax and Economic Policy, Tax Foundation
- Justin Field, Senior Vice President of Government Affairs, National Venture Capital Association
- Laura Yamanaka, Board Chair, National Association of Women Business Owners (NAWBO) Institute for Entrepreneurial Development
Panel 2: Addressing State Budget Shortfalls (noon – 1:00 p.m. ET)
- How serious are state budget shortfalls, how much has the federal government already delivered in aid, and should it do more? If so, how can Congress minimize negative consequences in the future?
- States are considering a range of tax policies to help bolster their budgets—gross receipts taxA gross receipts tax is a tax applied to a company’s gross sales, without deductions for a firm’s business expenses, like costs of goods sold and compensation. Unlike a sales tax, a gross receipts tax is assessed on businesses and apply to business-to-business transactions in addition to final consumer purchases, leading to tax pyramiding. es, head taxA head tax, also known as a poll tax or capitation, is a flat or uniform tax levied equally on every taxpayer. Unlike an income tax, it is a fixed amount and not based on how much one earns, nor does it change based on any taxpayer circumstance or action. es, digital services taxes, excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. es. How do these options compare to more traditional revenue sources?
- What solutions should states pursue to address near-term budget gaps while achieving long-term stability?
- Jared Walczak, Vice President of State Projects, Tax Foundation
- Kathryn White, Director of Budget Process Studies, National Association of State Budget Officers (NASBO)
- Morgan Scarboro, Manager, Tax Policy & Economist, Multistate Associates
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