Closing the “tax gap,” or revenue owed to the federal government that goes uncollected, has long been a favorite deus ex machina for lawmakers who want more revenue without having to raise rates. But Internal Revenue Service (IRS) Commissioner Chuck Rettig really put dollar signs in lawmakers’ eyes when he claimed the tax gap could be as large as $1 trillion. Always eager to appear knowledgeable on policy issues, Sen. Elizabeth Warren is putting forward a plan to collect extra revenue that only gets worse the deeper you dig into it.
First and foremost, it’s important to understand how far off on an island Rettig is with his estimate. The IRS’s last official estimate of the size of the tax gap placed it at a far, far lower $381 billion. Even considering that this estimate may not have factored in underpayment from cryptocurrencies, offshore holdings, and pass-through businesses, the tax gap still remains far closer to $500 billion than to $1 trillion.
Millions of American families will receive hundreds of dollars in regular federal payments beginning next month, the Internal Revenue Service said Monday.
The IRS announced July 15 as the start date for monthly child tax credit payments that would affect the vast majority of Americans with children.
“Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above,” the IRS said in a statement.
Alabama will soon cease participating in the federal government’s unemployment insurance program that grants out-of-work Americans an extra $300 per week, the state’s governor said.
Republican Gov. Kay Ivey announced that the state would withdraw from the coronavirus relief program by June 19, 2021, arguing that the $300 in additional weekly payments was incentivizing people not to look for jobs. She suggested that the labor shortages reported in states across the country have been caused by the unemployment boost.
“As Alabama’s economy continues its recovery, we are hearing from more and more business owners and employers that it is increasingly difficult to find workers to fill available jobs, even though job openings are abundant,” Ivey said in a statement.
Is the economy booming or is it riding a wave of paper money with no real underlying sustainability? That is the question which policy makers in Washington, DC should be considering.
The truth is no one actually knows, but that is exactly why this discussion must be had.
Since the China virus was inflicted upon the world, it is indisputable that the federal government has authorized $5 Trillion between the Trump spending of $3.1 Trillion to meet the crisis and Biden’s recently passed additional $1.9 trillion so he could sign checks to people too. This is on top of the $1 Trillion in planned deficits during the 2020 fiscal year.
Along with a working vaccine, Joe Biden inherited a V-shaped economic recovery, but he is now planting the seeds of its destruction. Inflation, federal deficits, high taxes, incentives for workers to stay home, and incentives to avoid investment – they’re all coming back. Together, these elements create the perfect brew for a Lyndon Johnson-style stagflation. If Biden and the Democrats so quickly wreck the good economic path they were given, it will be one of the worst examples of government malpractice in U.S. economic history.
In the first, dark days of the COVID-19 national economic shutdown last spring, there was a clear need for major stimulus. Both parties united to pass an effective and much-needed response.
The U.S. gross domestic product saw a 33.4% surge in the July-September third quarter of 2020, after plunging 31.4% in the April-June second quarter. The economy continued to grow at a 4% rate in the fourth quarter, and the stock market (despite COVID) ended 2020 with the S&P 500 index up 16% for the year as a whole.
Georgians are circulating petitions demanding that the state government, particularly the Georgia Department of Labor (GDOL) begins responding to their requests for information.
“This petition was started and organized by residents all throughout the State of Georgia that have filed claims with the Georgia Department of Labor,” says a Change.org petition started by Felicia Primus. “Many of Georgia Residents [sic] haven’t received any updates on claims or they’re missing payments from the Department of Labor. GDOL has not provided better Self-service [sic] options for its website or phone support to help with the increasing demand of unemployment claims, during the COVID-19 pandemic.”
Virginia business advocates praised the COVID-19 stimulus package passed by Congress but said additional state action is necessary for businesses to receive the full benefits of the legislation.
The $900 billion COVID-19 stimulus provides about $325 billion in aid to small businesses nationally, including $284 billion for forgivable Paycheck Protection Program (PPP) loans, $20 billion for Economic Injury Disaster Loan grants, $15 billion for live venues, independent movie theaters and cultural institutions and another $12 billion for businesses in low-income and minority communities.
Congress’ bill also addressed a couple of concerns businesses raised regarding the first wave of PPP loans. The bill simplifies the forgiveness applications and makes the loans tax deductible at the federal level. The deductibility applies to loans that already have been received and any loans received in the second wave, which would prevent a hidden tax increase on businesses.
A Tennessee Congressman is taking a stand against this week’s COVID-19 stimulus package passed by Congress.
“We need to quit funding foreign countries,” Rep. Tim Burchett (R-TN-02) told The Tennessee Star by email. “Americans are struggling right now, I don’t know what the magic number is for direct payment but I know the amount needs to be more than $600.”
With nine session days left in 2020, Gov. Gretchen Whitmer asked the Republican-led Legislature to pass a $100 million COVID-19 stimulus package as well as several other pieces of legislation.
“This is the most urgent public health emergency our state has faced in our lifetimes, and it demands our full, immediate, and unified attention,” Whitmer wrote in a letter.
As the 10th most populated state in the country, Michigan may be a major beneficiary of the federal stimulus package currently winding through the U.S. Capitol.
Following Ohio’s shocking unemployment rate increase of 2,565 percent, one economist says the COVID-19 coronavirus’ economic impact will be “long lasting” and provides a list of recommendations.
Live from Nashville, Tennessee Wednesday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m.– Leahy and Carmichael discussed the economy and its effects caused by the coronavirus pandemic.