Trump’s tariff hikes would rank as the the largest tax increase outside of wartime since 1940. Meanwhile, Harris’s tax plan would rank as the 6th largest tax increase outside of wartime since 1940.
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From President Biden calling the Tax Cuts and Jobs Act the “largest tax cut in American history,” to former President Trump claiming that Biden “wants to raise your taxes by four times,” the campaign rhetoric on taxes may be sparking some confusion.
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As the deadline for tax filing nears, the IRS faces scrutiny for its backlog of returns, inaccessible taxpayer service, and delays in issuing certain refunds.
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A new report finds many businesses have yet to receive tax refunds that they are due from pandemic-related emergency relief. Future business tax relief must be provided in a timely manner during the next downturn, because delayed tax relief is not much better than no relief at all.
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In 2020 and 2021, Congress enacted three rounds of economic impact payments (EIPs) for direct relief to households amidst the pandemic-induced downturn. Survey data from the U.S. Census Bureau indicates that households increasingly saved their EIPs or used them to pay down debt rather than spend them.
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During the pandemic, economic relief administered through the tax code exploded as Congress passed nearly $6 trillion of legislation into law. That left the 2021 tax filing season, which ended May 17, with complications that still linger.
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The increase in expenditures associated with COVID-19 relief is another illustration of using the tax code to administer social spending.
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The IRS recently announced the extension of tax filing and payment deadlines from April 15th to May 17th to help taxpayers navigating the many tax changes amid the pandemic and give the IRS opportunity to clear its backlog of tax returns and correspondence.
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Congress chose to exempt forgiven Paycheck Protection Program (PPP) loans from federal income taxation. Many states, however, remain on track to tax them by either treating forgiven loans as taxable income, denying the deduction for expenses paid for using forgiven loans, or both.
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The House Ways and Means Committee measures would further extend the relief measures created by the CARES Act and the Consolidated Appropriations Act of 2021, and would go further by significantly expanding existing tax credits and making changes to the international tax system.
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President Biden is calling for a third round of economic impact payments to households as part of his $1.9 trillion American Rescue Plan. Under the plan, the payments would be $1,400 per person, topping off the recent round of $600 payments for a combined $2,000 per person. Senate Republicans have proposed payment amounts of $1,000 per individual and $500 per dependent, lower income thresholds, and faster phaseout rates.
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Unless the legislature acts, businesses that have received PPP loans and related federal assistance will face $457 million in state taxes through 2024—with more than half of those taxes coming due this spring—despite Wisconsin being on track to see continued general fund revenue growth even amid the pandemic.
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Newly published data from the Internal Revenue Service (IRS) shows that the first round of economic impact payments primarily benefited households earning less than $100,000.
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Tax extenders are no stranger to hitching a last-minute ride on year-end legislation. This year they made another last-minute appearance, finding a hold in their own division of the 5,593-page bill to fund the government through the fiscal year and provide additional coronavirus relief through March.
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The coronavirus relief package represents the second-largest recovery legislation, behind only the CARES Act, for a combined total of more than $3 trillion in support.
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As Congress works to provide another round of emergency economic relief, it is a good time to step back and consider how tax policy affects entrepreneurs and small businesses.
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Combined state and local tax collections were down only $7.6 billion across the period, representing a total state and local tax revenue decline of 0.7 percent compared to the first nine months of 2019.
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A bipartisan group of lawmakers released two compromise relief bills to address the COVID-19 pandemic, totaling about $908 billion: The Emergency Coronavirus Relief Act and the Bipartisan State and Local Support and Small Business Protection Act.
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On Monday, members of the bipartisan Gang of Eight negotiating an end-of-year pandemic relief package announced that they had settled on language and had divided the package into two bills: a pandemic aid package and a $160 billion state and local support package.
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Any additional relief to address a temporary economic crisis should be temporary, targeted toward those most in need, and consistent with good long-term tax policy.
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