IRS Delays April 15 Tax Filing Deadline
Tax day is getting delayed.
Facing a huge backlog of unprocessed tax returns and growing calls from accountants and lawmakers to extend this year’s filing period given the changes to the tax code in President Biden’s Covid relief plan, the Internal Revenue Service is pushing back the April 15 deadline to May 17.
"This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," IRS Commissioner Chuck Rettig said in announcing the delay. "Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds."
Lawmakers of both parties had pressed the agency to extend the deadline after the $1.9 trillion American Rescue Plan was passed earlier this month, requiring tax preparers to update their systems and tasking the IRS with sending out another round of relief payments even as it processes annual returns.
“This extension is absolutely necessary to give Americans some needed flexibility in a time of unprecedented crisis,” House Ways and Means Committee Chairman Richard Neal (D-MA) and Oversight Subcommittee Chairman Bill Pascrell, Jr. (D-NJ) said in a statement. “Under titanic stress and strain, American taxpayers and tax preparers must have more time to file tax returns.”
The IRS had pushed back the start of this year’s tax season to February 12, about two weeks later than usual, compressing what promised to be a complicated filing year even before the latest Covid relief law was enacted.
Number of the Day: $242 Billion
The Treasury Department and IRS said Wednesday that they have sent about 90 million direct payments so far totaling more than $242 billion under the latest Covid relief law. That’s more than half of the $410 billion in payments approved as part of the new law. While most of the payments so far were made by direct deposit, Treasury said it also sent out about 150,000 checks worth approximately $442 million.
You can check the status of your payment by using the Get My Payment tool at the IRS website.
Quote of the Day
“Anybody making more than $400,000 will see a small to a significant tax increase. If you make less than $400,000, you won't see one single penny in additional federal tax.”
– President Biden, in an interview with ABC News, reiterating his campaign pledge to not raise taxes on people making under $400,000 annually. Asked how he would get Republicans to vote for a tax hike, Biden said, “I may not get it, but I'll get the Democratic votes for a tax increase” — and went on to say that he supports filibuster reform that would require members to speak on the floor to delay action on a bill.
Warren, Sanders Want to Tax Companies With High CEO Pay
Sens. Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) introduced a bill Wednesday that seeks to rein in what they see as excessive CEO pay.
Under their proposal, companies that pay their CEOs more than 50 times the average employee would face higher tax rates, starting with a surtax of 0.5% that increases to 5% for companies that pay their CEOs more than 500 times the average employee. Backers of the plan say it could raise as much $150 billion over 10 years.
Some Republicans Decry Their Party’s Lack of Effective Pushback on Covid Relief
Some conservatives and Trump Republicans are suggesting that the GOP botched its attacks on Democrat’s massive Covid relief bill, Politico reports:
“[I]n interviews with top GOP operatives, Trump confidantes, and congressional aides, there was a common refrain that the party could have done more to frame it for the public. Instead, periodic claims that the bill was bloated with progressive add-ons and bailout money for blue states were overshadowed by a more relentless focus on the culture wars du jour.”
Deficit dilemma: Some Republicans told Politico that part of the party’s messaging struggle about the popular relief bill was rooted in its recent support for deficit spending and relief packages that included similar elements to those in the Democratic bill. Republicans attacked the Biden plan as a liberal wish list and criticized the president for what they said was a lack of bipartisanship. They didn’t focus much on the package’s deficit-raising effects.
“Republicans lost credibility on that issue during the Trump years, especially the first couple years when we had the power to do something about it,” Brendan Steinhauser, a Republican consultant and former campaign manager to Texas Sen. John Cornyn, told Politico. “There was no interest in doing anything about it. It was just, ‘let’s not even talk about spending or the debt or deficit or anything like that.’”
Those challenges were likely made worse by the giant shadow of Trump himself, who had publicly called for larger stimulus payments, slammed Republicans who opposed them and then served as an added distraction because of his impeachment trial.
Republicans haven’t stopped fighting the relief plan: “Ohio Attorney General Dave Yost sued the Biden administration Wednesday over its $1.9 trillion coronavirus relief package, alleging the federal government sought to impose ‘unconstitutional’ limits on states’ ability to access some of the aid,” The Washington Post reports.
The lawsuit comes a day after 21 other Republican attorneys general sent a seven page letter to Treasury Secretary Janet Yellen challenging the American Rescue Plan’s requirement that state and local governments getting aid money cannot use the funds to “indirectly or directly” offset the cost of tax cuts. The letter argues that the limit on those governments’ ability to cut taxes is “an unprecedented and unconstitutional intrusion on the separate sovereignty of the States.”
The Biden administration is defending the provision. “It is well established that Congress may establish reasonable conditions on how states should use federal funding that the states are provided,” said Treasury Department spokesperson Alexandra LaManna.
House Republicans Vote to End Earmark Ban
The House Republican conference voted 102 to 84 Wednesday to end a ban on earmarks, which allow lawmakers to designate funds for specific projects within their districts.
Banned from Congress during the rise of the tea party in 2011, earmarks have long been associated with questionable spending deals like the infamous “bridge to nowhere” in Alaska, as well as scandals involving corrupt lobbyists. But Democrats, arguing that earmarks would help restore the power of the purse to the legislative branch, plan to bring them back this year, albeit with a new name (“congressionally directed spending”) and a variety of new rules intended to limit the potential for corruption.
House Republicans debated the issue behind closed doors, with some speaking in favor of maintaining the ban. Members of the House Freedom Caucus, which is ideologically aligned with the tea party conservative movement, were reportedly strongly opposed to ending it, decrying the practice as “legislative bribery.”
“I think we've got $30 trillion in debt and people are tired of the swamp and the GOP should be ashamed of itself, if it jumps headfirst right back into the swamp,” Rep. Chip Roy (R-TX), a member of the caucus, said.
But others said that refusing to use earmarks would allow the Biden administration to exert greater influence on spending while putting Republicans at a disadvantage during the budgeting process.
“The Democrats want to bring [earmarks] back,” House Minority Leader Kevin McCarthy (R-CA) said. “There's a real concern about the administration directing where money goes. This doesn't add one more dollar. I think members here know what's most important about what's going on in their district, not Biden.”
The GOP House vote leaves Senate Republicans as the only group that is sticking with the ban, at least for the time being. Senate Appropriations Chairman Patrick Leahy (D-VT) said he is willing to dedicate half of the funds allocated for earmarks to Republicans, but it’s not clear they’re interested in taking him up on the offer. Republican senators voted on a permanent ban on earmarks in 2019, and some have indicated they want to maintain it.
Senate Minority Leader Mitch McConnell (R-KY) spoke out against the revival of earmarks last month. “I represent the entire conference and I can tell you the overwhelming majority of the Republican Conference in the Senate is not in favor of going back to earmarks,” he told Fox News. “I’m assuming those people — even if Democrats craft the bill so that those are permitted — will not be asking for them.”
- The Right Kind of Welfare Reform – Ryan Cooper, The Week
- The Ideas That Are Reshaping the Democratic Party and America – Perry Bacon, FiveThirtyEight
- Republicans Might Regret Attacking Biden’s Rescue Plan – Jennifer Rubin, Washington Post
- Biden Just Fired a Warning Shot at Mitch McConnell and Republicans – Greg Sargent, Washington Post
- Would Biden’s Tax Hike Really Spare the Middle Class? Nope – Michael R. Strain, Bloomberg
- The Post-Pandemic Economy Will Boom — but Not for All – David Ignatius, Washington Post
- The Post-Pandemic Labor Market’s Long-Term Scars – Laura Tyson and Susan Lund, Project Syndicate
- Who Needs Earmarks? Republicans Do – Karl W. Smith, Bloomberg
- Jerome Powell Refuses to Humor Bond Traders’ Tantrums – Brian Chappatta, Bloomberg
- There’s No Half-Way to End the Filibuster – Jonathan Bernstein, Bloomberg
- Trump Should Tell His Fans to Get the Vaccine – Washington Post Editorial Board
- Federal ‘Brain Drain’ Threatens American Scientific Leadership, New Report Says – Joe Davidson, Washington Post