Minding the gap… The Senate Finance Committee’s top Republican, Mike Crapo, asked IRS Commissioner Chuck Rettig to explain his estimate of a $1 trillion tax gap. Crapo wants to know how much is attributable to asset and price growth between 2011 and 2013, cryptocurrency holdings, and unreported income from foreign sources and pass-through organizations. He also questioned whether a study produced by Treasury and the Joint Committee on Taxation has overstated wealthy individuals’ share of tax evasion.
An estimated 1.3 million people could claim over $1.3 billion in 2017 tax refunds. The IRS warns that people who don’t file a 2017 Form 1040 could lose more than that year’s tax refund — they may lose out on the Earned Income Tax Credit, too.
The more things change, the more things stay the same. The government’s economic response to the pandemic showed it can quickly mobilize resources in a crisis, but can it implement longer-term changes to support the economy? TPC’s Erald Kolasi and Gene Steuerle describe how $3.5 trillion in 2020 pandemic relief has altered the nation’s long-term budgetary path. In their review of the first Congressional Budget Office report of the Biden presidency, they find that “more than all the growth in revenues from 2019 to 2030 remains committed in ways that greatly restrict any new investment in the American people for anything other than healthcare and retirement.”
California may soon issue tax rebates. The state is running a $76 billion budget surplus, thanks to higher-than-expected taxes paid by wealthy Californians. Democratic Gov. Gavin Newsom has proposed $8.1 billion in tax rebates of up to $1,100 for 11 million low- and middle-income Californians. Households with at least one child would receive an additional $500 payment. Newsom, who faces a recall vote, also would give over $7 billion in pandemic aid to help people to cover rent and utilities.
Georgia’s one week fuel tax cut. Republican Gov. Brian Kemp suspended the state’s 7.5-cent-per-gallon tax on diesel and motor fuel –until Saturday. Six days ago, Georgia-based Colonial Pipeline went offline following a cyberattack. It carries over 100 million barrels of refined oil products daily.
In Colorado, Democratic lawmakers propose tax relief for lower-income families and tax increases for some wealthier people. Two bills would raise an estimated $400 million a year by reducing or eliminating some tax deductions taken by high-income households and businesses. About $250 million would support lower income families and small businesses. The Democrats argue the bills would not require voter approval under the state’s Taxpayer Bill of Rights (TABOR), because they change definitions and deductions but not tax rates.. Democratic Gov. Jared Polis backs the changes.
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