On The Money: Sanders creates new headache for Biden on taxes | IRS: Costs of PPE can be deducted from taxes | Democrats ask watchdog to tackle racial bias in home appraisals
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THE BIG DEAL—Sanders creates new headache for Biden on taxes: Senate Budget Committee Chairman Bernie Sanders (I-Vt.) is pushing a more aggressive approach to taxing companies and wealthy families, creating a new problem for President Biden.
While the White House faces heat from Republicans over its planned tax hikes, the proposals from Sanders go well beyond the revenue-raising measures Biden backed in his campaign.
- In one piece of legislation unveiled Thursday, Sanders proposed raising the corporate tax rate from 21 percent to 35 percent, well above the 28 percent level Biden has proposed, and adding stricter measures than Biden proposed for taxing offshore profits.
- A second bill would put in a more stringent estate tax, lowering the threshold for when an estate would be hit with the tax from $11 million to $3.5 million for single people and from $22 million to $7 million for couples. He’d also raise the tax rate to as much as 65 percent for estates over $1 billion.
The political dynamic: The proposals underscore how Sanders is continuing to push Biden to the left, as he did during the presidential primary race when his support was often second only to the president.
But the pressure creates a number of problems for Biden, who is seeking to pass legislation through a Senate with 50 Democrats and 50 Republicans. The Hill’s Niv Elis explains here.
LEADING THE DAY
IRS: Masks, sanitizer bought to fight COVID-19 can be deducted from taxes: The IRS said Friday that taxpayers can deduct the costs of purchasing personal protective equipment (PPE) meant to prevent the spread of COVID-19 from their taxes.
- The IRS said that taxpayers who’ve spent at least 7.5 percent of their adjusted gross income on PPE such as masks, hand sanitizer and disinfectant wipes “for the primary purpose” of curbing the pandemic can deduct those costs from their taxes.
- The IRS also said that taxpayers can use funds in tax-exempt health savings accounts, Archer medical savings accounts, health reimbursement arrangements and health flexible spending arrangements to pay for PPE used to stop the spread of COVID-19.
Democrats ask watchdog to tackle racial bias in home appraisals: More than 30 Democratic lawmakers are asking an interagency panel of financial regulators to take action against racial discrimination in house appraisals.
In a letter released Friday, Sen. Amy Klobuchar (D-Minn.), Sen. Raphael Warnock (D-Ga.), Rep. Emanuel Cleaver (D-Mo.) and several dozen Democratic colleagues asked the Federal Financial Institutions Examination Council (FFIEC) to work with the housing appraisal industry to reduce disparities in home valuations for communities of color.
The background: Racial discrimination has suppressed Black and Hispanic homeownership levels for decades and severely limited the ability of families of color to accumulate wealth through property.
- The lawmakers cited a 2018 report from the Brookings Institution that found that homes of similar quality in similar neighborhoods are valued 23 percent less in majority Black neighborhoods than they would be in areas with few Black residents.
- The Appraisal Institute, a trade group representing the home appraisal industry, also acknowledged this year that racial bias does impact the valuation of homes and would take steps to address it within their ranks.
I explain here.
GOOD TO KNOW
- The Washington Post: “Asian American businesses are defending themselves against rise in anti-Asian violence”
- CNBC: “S&P 500 closes at a record, Dow jumps 450 points as stocks rally in the final minutes of trading”
- New York Times: “With Suez Canal Blocked, Shippers Begin End Run Around a Trade Artery”
- The Wall Street Journal: “Covid-19 Clobbered Manhattan. Lower Rents Could Seed Recovery.”
Recap the week with On The Money:
- Monday: New batch of stimulus payments to hit accounts Wednesday | Biden eyes $3T infrastructure package | Senate confirms Walsh as Labor secretary
- Tuesday: Yellen defends raising taxes ‘in a fair way’ to fund infrastructure plan | Senate confirms Young as deputy budget director | Fed creates climate financial risk panel
- Wednesday: House Democrats express alarm over slow stimulus checks | Yellen tamps down on debt concerns | Megan Rapinoe visits White House for Equal Pay Day
- Thursday: Social Security gives IRS data for COVID-19 relief checks | Senate passes bill heading off Medicare cuts
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