Despite Tax Deadline Delay, Taxpayers Should File Early to Receive Refunds

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Posted by Alex Hendrie on Saturday, March 21st, 2020, 1:15 PM PERMALINK

In response to the Coronavirus pandemic, the Trump administration recently announced that they will delay Tax Day for three months – moving the deadline to file taxes from April 15 to July 15. 

This is good news. As noted by Treasury Secretary Steven Mnuchin, this will give businesses and individuals more time to file without incurring penalties.

At a time that many Americans are experiencing financial difficulties from a lost job or fewer work hours, this decision will help ensure much-needed liquidity to meet everyday expenses.

However, this should not be an excuse for Americans to sit on their hands if they are due to receive a refund, as a majority of taxpayers receive every year.

Taxpayers should file as soon as possible so that they receive their money back from the government as soon as possible. Failure to do so means extending the interest free loan that many individuals give the government from overpaying taxes throughout the year.

According to IRS data, almost three in four Americans receive a tax refund averaging $3,000. Despite this, many people wait until the last minute to file every year.

Based on prior years, an estimated 35 million Americans – or 25 percent of total filers – wait until the last two weeks of tax season (April 1-15) to file. Of these 35 million taxpayers, over half receive a refund averaging $2,000. 

This could equal to $35 billion that can be sent back to the economy -- money which the IRS owes taxpayers. At the best of times, this is a significant sum. At a time of unprecedented economic volatility, this injection of cash is vital.

While the administration should be praised for delaying the tax deadline, this should not be an excuse for needless delay on the part of American taxpayers. They should file as quickly as possible to receive the thousands of dollars they are likely owed -- a move that will collectively inject billions of dollars into the economy.

Photo Credit: Martin Haesemeyer


Airline Rescue Package Should Provide Tax Relief

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Posted by Mike Palicz on Thursday, March 19th, 2020, 1:09 PM PERMALINK

On Wednesday, President Trump announced that the airline industry “would be the number one priority” for a federal assistance package in response to a demand drop-off following government restrictions on travel to combat the Coronavirus outbreak.

The airline industry now faces a dire situation as flight cancellations are rapidly outpacing new flight bookings. Industry trade groups are estimating that revenue loss could total $113 billion globally. In response to the crisis, Treasury Secretary Steven Mnuchin was on Capitol Hill Tuesday meeting with Senators to discuss the terms of a rescue package for the industry.

As the Trump administration and Congress weigh options for an aid package, providing tax relief for airline companies should be at the forefront of policy options.

Specifically, this would include the temporary repeal of excise taxes paid by airline companies. This would include excise taxes on jet fuel, cargo and passenger tickets. Providing relief on excise taxes would also crucially increase consumer demand that has plummeted from the virus’s outbreak. Taxes currently make up over 20% of the cost of a domestic airline ticket. Temporary tax relief will lower airfare costs to increase consumer demand after the outbreak is contained and travel restrictions are lifted. 

Rebates of these same excise taxes that have already been paid by airlines should also be considered. Monthly Treasury reports show that collections of these taxes paid into the Airport and Airway Trust Fund totaled close to $4.3 billion through February. Given the sharp demand drop off experienced in March, it is reasonable to assume that total collections thus far are not significantly higher. Currently, the trust fund has an uncommitted balance approaching $6.5 billion. This means a rebate of excise taxes already collected in 2020 could be paid for with the uncommitted balance of the trust fund.

Given the AATF is funded on a user fee model, the principle should be maintained in reverse to fund any airline relief package. This will reduce the need to fund a package with transfers from general revenue, thus reducing the burden placed upon taxpayers in any relief package.

Photo Credit: Jason O'Halloran

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ATR Supports Russ Vought Nomination for OMB Director

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Posted by Alex Hendrie on Wednesday, March 18th, 2020, 5:00 PM PERMALINK

ATR President Grover Norquist today released the following statement in support of Russell T. Vought for the position of Director of the Office of Management and Budget (OMB):

“Russ Vought has been a champion of pro-growth, fiscally responsible regulatory reform, spending reform, and tax reform. He is the perfect choice to permanently lead the Office of Management and Budget and shepherd through policies that address Washington’s overspending problem and grow the economy. The Senate should swiftly confirm him to lead OMB.”

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Admin's Floated "Buy American" Mandate Could Create Pharmaceutical Shortages

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Posted by Alex Hendrie on Wednesday, March 18th, 2020, 4:14 PM PERMALINK

Recent reports indicate that the administration may propose a “Buy American” executive order that would impose domestic purchasing requirements on pharmaceuticals and medical supplies.

If implemented this Buy American mandate would disrupt existing supply chains at a time that medical care is needed now more than ever.

It would lead to higher costs, could prompt retaliatory actions from foreign countries, and could further harm economic growth. At the very least, this issue should be debated at a time when the country and the world is not in a global pandemic.

The supply chain for biopharmaceuticals is inherently global and diverse. It is complex and incorporates numerous inputs from across the globe including raw materials, active pharmaceutical ingredients, and high precision analytical tools. 

By design, it is also efficient and flexible in order to protect against emergencies including regional disruptions in manufacturing or shortages.

A Buy American mandate threatens this efficiency and flexibility. It would increase costs and make the industry less efficient. A best-case scenario would require significant and time-consuming changes to existing supply chains that would result in increased long and short-term costs. 

At worst, there would be significant disruptions to pharmaceuticals due to a lack of access to raw materials, labor force issues, and existing regulations hampering manufacturing.

The fact is, manufacturing is capital intensive and requires numerous inputs, regardless of whether it involves pharmaceuticals, machinery, or electronics. Recent policy proposals that restrict the supply chain such as tariffs have already crushed many types of manufacturing. It has also led to retaliatory measures from foreign trading partners that have further harmed American businesses.

A buy American mandate risks doing the same to the pharmaceutical industry.

If the administration wants to encourage American manufacturing, it should promote policies that encourage investment and allow businesses to grow and avoid new mandates.

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List: International Tax Cuts & Emergency Plans Due to COVID19 Outbreak

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Posted by Andreas Hellmann on Wednesday, March 18th, 2020, 3:38 PM PERMALINK

Due to the COVID-19 outbreak many countries around the world are enacting tax cuts and emergency plans to support their struggling economies. 

Below is a list of examples of emergency tax cuts, plans, and suspensions from all over the world. We will be continuously updating this collection.  If you have another example to add, please send it to ckazakou@atr.org.  

You can also find a list of how the US is suspending Rules and Regulations due to COVID-19 here

Emergency Tax Cuts and Plans list:

Italy enacts tax relief to cushion Coronavirus emergency
 

Italy’s Economy Minister, Roberto Gualtieri, announced that the government will adopt measures costing EUR 3.6 billion (USD 4 billion) to help the economy. Specifically, a tax credit will be granted to companies that suffer a 25% fall in revenues. Additional funds are also provided to Italy’s health service.

Indeed, the decree provides, among other measures, to increase the guarantee fund for small and medium businesses with a priority, for 12 months, to grant a credit to businesses operating in red zones, encompassing the agri-food sector. - MNE Tax (03/02/2020)

Japan – Extended Tax Filing Deadline, Other Government Steps Due to COVID-19
 

The National Tax Agency has released the announcement that filing and payment due dates for individual income tax, individual consumption tax, and gift tax for 2019 will be extended by one month to April 16, 2020 due to the spread of Covid-19. - KPMG (03/02/2020)

Greece Moves to Help Business in Coronavirus Affected Areas

Greece will suspend for four months the payment of sales tax amounts that were to due to be paid by the end of March, Finance Minister Christos Staikouras announces in Athens. Suspension also for four months of payment of outstanding debt obligations. Next week’s Eurogroup meeting must immediately take concrete initiatives to tackle the negative effects of the virus on growth and public finances - BloombergTax (03/09/2020)

Germany Moves to Slow Virus With Empty Stadiums, Furlough Pay
 

Merkel’s coalition to invest 12.4 billion euros until 2024. Aid for furloughed workers to be expanded until end of 2020. Should Germany enter a serious crisis, its response would dwarf a proposed cut in the so-called solidarity tax by 5 billion euros ($5.7 billion) this year, Scholz told RND newspaper consortium.- BloombergTax (03/09/2020)

Denmark Grants $20 Billion in Tax Breaks to Firms Hit by Virus

Denmark’s government will grant tax breaks to businesses affected by the coronavirus as part of a series of measures worth $20 billion. - BloombergTax (03/10/2020)

Thai Cabinet Approves Phase One of Covid-19 Stimulus Package

The package includes 180b baht ($5.7b) of soft loans from Government Savings Bank and the Social Security Fund, Finance Minister Uttama Savanayana says in a briefing in Bangkok. 
- A cut in the withholding tax to 1.5% from 3% during April to September
- Doubling the tax benefit for investment in long-term mutual funds -- so-called super savings funds to 400,000 baht.
- BloombergTax (03/10/2020)

UK Government announced tax deferral measures

The government announced tax deferral measures and freezes on business property taxes for retail, leisure, and tourism to reduce the economic impact of the coronavirus.

The budget also contained promises to: Keep the corporate tax rate at 19%. Reduce the lifetime limit of entrepreneurs’ relief—which allows business founders to pay 10% capital gains tax, less than the usual rate, when they sell their businesses. Freeze fuel duty for the 10th consecutive year. Get rid of value-added tax on digital reading materials and female sanitary products. Freeze all alcohol duties. Make it easier to access tax-free child care.- BloombergTax (03/11/2020)

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Indonesia Eases Tax for Individuals, Cos to Counter Virus Impact

Government will waive income tax for individuals for six months as it seeks to boost purchasing power and counter an economic slowdown worsened by the coronavirus outbreak. - BloombergTax (03/11/2020)

Coronavirus: Macron announces drastic measures in France

When it comes to employees, the French leader announced the implementation of an “exceptional and massive mechanism of partial unemployment”. For companies, it will be possible to postpone “without justification, without formality, without penalty [the] payment of contributions and taxes due in March."- Euractiv (03/13/2020)

Spain closes tax office on coronavirus epidemic

Spain has announced VAT and other tax payment holiday for small businesses who apply for relief for the coronavirus (Covid-19) outbreak. The scheme is not available for large businesses (above €6m turnover) or if the Value Added Tax due is above €30m. - Avalara (03/15/2020)

UK Extends Property Tax Relief for a Year to Virus-Hit Sectors
 

The UK government is extending business property tax waivers to all companies in the retail, hospitality, and leisure industries as part of a multi-billion pound rescue package for businesses affected by coronavirus. - Bloomberg (03/17/2020)

Norway may cut 12% reduced VAT rate to 8%

The Norwegian government is said to be considering a cut to the 12% reduced VAT rate to 8% for the duration of the coronavirus crisis. The rate applies to cinema admission, public transport, hotel accommodation services, entrance to cinemas, museums and amusement parks. - Avalara (03/17/2020)

Belgium delays VAT filings & payments on coronavirus worries

The Belgian authorities have confirmed that they will allow companies to delay the filings by over two weeks and payments by two months. It had already offered an application process for companies needing delays due to COVID-19 outbreak. - Avalara (03/18/2020)

Netherlands COVID-19 VAT reliefs

The Dutch tax agency has published details of a range of Value Added Tax easements for businesses during the coronavirus epidemic. Other taxes will have similar easements. Dutch VAT easements include:Businesses may apply for delayed VAT payments if they can show hardship as a result of the crisis. The tax office may cancel any penalties or interest for any late payments. This is done as soon as the application is received. Late penalty interest will be reduced from 4% to 0.01% from 1 June if found delay not related to crisis. Open VAT assessments will be amended if it appears VAT should be less due to the pandemic. Extra VAT relief on customer bad debts will be granted if related to crisis. - Avalara (03/18/2020)

Photo Credit: Riley Kaminer

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List of Tax Reform Good News

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Posted by John Kartch on Wednesday, March 18th, 2020, 12:00 PM PERMALINK


Congress Should Reject Efforts to Add Surprise Billing Proposals to Coronavirus Legislation

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Posted by Alex Hendrie on Wednesday, March 18th, 2020, 9:00 AM PERMALINK

According to recent media reports, members of the House and Senate are pushing to add unrelated price controls legislation to the phase three Coronavirus legislation. This would add contentious legislation dealing with surprise medical billing that has been opposed by conservatives on and off the hill to legislation that is being considered because of a national emergency. This should be rejected. 

Conservatives oppose price controls because they utilize government power to forcefully lower costs in a way that distorts the economically efficient behavior and natural incentives created by the free market.

Unfortunately, some lawmakers have proposed to implement price controls as a solution to surprise medical billing, which is when an individual receives an unexpectedly high medical bill as a result of being out of network or receiving emergency care.

While surprise billing should be addressed, some lawmakers have proposed solving this problem by using the heavy hand of government to set rates for any payments made to out-of-network providers. Under this proposal, the government would set a benchmark rate to resolve out-of-network payment disputes between insurers and providers. Benchmark rate-setting would replace private negotiations between insurers and providers with government-set prices, a blatant price control on the healthcare system. 

By giving government more control over the healthcare system, this rate setting proposal inches the healthcare system closer to socialized healthcare, which the left disingenuously calls “Medicare for All.”

Under Medicare for All, the government would set prices for all healthcare, an outcome that will lead to lower quality of care for patients and cut doctor compensation, which will reduce the amount of care supplied. 

Under this system, Americans would not have a choice of insurer or health benefits and the development of new treatments and technologies would be slowed. Under this system, Americans would not have a choice of insurer or health benefits and the development of new treatments and technologies would be slowed.

Unsurprisingly, there is significant opposition from conservatives to price setting and price controls. 75 conservative organizations recently released a letter urging Trump and Republican members of the House and Senate to oppose any price controls.

In addition, Congressman Andy Harris (R-Md.) released a letter signed by 39 conservatives in the House including new White House Chief of Staff Mark Meadows, House Freedom Caucus Chairman Andy Biggs (R-Ariz.), House Judiciary Committee Ranking Member Jim Jordan (R-Ohio), and Republican Study Committee Chairman Mike Johnson (R-La.).

Lawmakers need to take a serious, deliberative approach in addressing surprise billing instead of rushing to attach a flawed proposal that imposes price controls onto Coronavirus legislation. 

Photo Credit: Barnyz - Flickr


Trump Admin Announces That Medicare Will Cover Telehealth During Coronavirus Pandemic

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Posted by Tom Hebert on Tuesday, March 17th, 2020, 5:04 PM PERMALINK

The Trump administration is using its executive authority to temporarily cover telehealth services for Medicare beneficiaries in response to the Coronavirus pandemic. This change will allow patients to interact with their doctors via phone or video conferencing at no additional cost, covering commonly used services like Facetime and Skype. 

As the Coronavirus spreads across the United States, Trump rightly recognizes that telemedicine is a natural solution for patients to connect to their doctors during this public health crisis.

On March 13th 2020, Trump declared the Coronavirus pandemic a national emergency, allowing the Center for Medicare and Medicaid Services (CMS) to act quickly to provide maximum flexibility for patients and providers. 

Prior to this declaration, Medicare was only allowed to pay for telemedicine in certain circumstances, such as for rural patients that lacked easy access to their doctors. In these situations, the patient would have to travel to a medical facility and teleconference with their doctors, and beneficiaries could not generally receive care in their homes. 

The Trump Administration has previously expanded telemedicine in Medicare. Over the past two years, beneficiaries have been able to briefly check in with their doctors via phone, videoconferencing, or online patient portals. 

The telemedicine expansion for Coronavirus allows a wide range of providers (doctors, nurse practitioners, clinical psychologists, and licensed social workers) to offer telehealth services to Medicare beneficiaries. Beneficiaries can receive telecare at any healthcare facility, like nursing homes or physician’s offices, or from the comfort of their own homes. 

In order to allow patients to more easily communicate with their providers, the Administration loosened the HIPAA requirements surrounding telemedicine. This important change allows doctors to see patients via commonly used apps like Facetime and Skype that were previously non-HIPAA compliant. 

Beneficiaries will be able to receive a wide range of services under this expansion, including routine check-ins, mental health counseling, and preventative health screenings. 

Seniors are at the highest risk of harm from the Coronavirus. Allowing Medicare beneficiaries to receive a wide range of services via telemedicine reduces their risk of exposure to the disease and allows providers to focus on the most critical patients during this health crisis. 

Photo Credit: Gage Skidmore


Germany’s Proposed Digital Antitrust Reform Targets American Companies

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Posted by Andreas Hellmann & Chrysa Kazakou on Tuesday, March 17th, 2020, 4:35 PM PERMALINK

A massive legislative project was introduced by the German Ministry for Economic Affairs last year, which aims to heavily regulate the digital sector by pushing innovative American companies out of the market. 

The proposal which claims to establish “fair competition” is set to be implemented in the second half of 2020 and includes: 

- Imposing stricter antitrust rules on companies that attracting “too many customers.

- Reserve the right of government intervention when a market tips (when customers find it in their best interests to use a common platform).

- Seize knowledge and data from tech market leaders and distribute them to other competing companies.

- Giving the German Antitrust Agency “Bundeskartellamt” greater antitrust oversight and investigation powers on successful companies that develop unique abilities to match buyers and sellers.

This patchwork of privacy and competition law will significantly hurt German customers and businesses. This dangerous combination results in limiting innovation and discourages healthy competition in a country that will diminish new investments for tech market leaders.

Instead of restricting competition and market access for American tech companies, the German government should embrace technology and innovation that makes a real-life difference in every German’s life. This legal tool for taming digital companies will satisfy German lawmakers, but it would make it even more challenging to create internationally competitive digital companies and remain competitive. 

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Trump Admin Expands Patient Freedoms With New Portability Rules

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Posted by Tom Hebert on Tuesday, March 17th, 2020, 12:07 PM PERMALINK

The Trump Administration recently issued two new healthcare rules that will allow patients to have complete access and control over their medical data. These rules will give patients portability over their data across medical providers while ensuring that this sensitive patient data is protected.

Under the current system, patients lack the ability to easily control their own health records and securely share them with doctors and hospitals. Since 2009, taxpayers have spent over $36 billion on electronic health records (EHRs), but the problem still hasn’t resolved itself. Compatibility across systems is shoddy, patients still have issues accessing their records, and buggy EHR software is ripe for fraud and abuse.

President Trump has consistently focused on improving and modernizing the healthcare system to the benefit of American patients. To that end, the Center for Medicare and Medicaid Services (CMS) launched the “MyHealthEd” initiative in 2018 to give patients better access and portability of their healthcare data.  

This initiative led to new healthcare rules from two federal agencies: CMS and the Office of the National Coordinator for Health Information Technology (ONC). Both rules streamline pathways for patients to access their health data via secure mobile applications. The rules allow patients to build a cumulative healthcare record that they access wherever they go. This will empower patients to more easily and securely access and release their data to providers of their choice. In turn, this increased flexibility and modernization will improve care coordination and lead to more efficient treatment. 

While any proposal to improve transparency should be welcomed, it is important that proposals protect consumer data and privacy, gives consumers information they can readily use, and do not result in unintended consequences that increase prices or make the healthcare system more complex. Policies that expand the size and scope of government should be rejected in favor of proposals that increase choice and access. 

These new portability rules build on the Trump Administration’s record of reforming healthcare so that patients have more options. 

  • Last year the administration finalized a rule allowing employers to offer health reimbursement arrangements (HRAs) to their employees to purchase insurance as an alternative to employer provided care. Rather than offering a health plan, an HRA allows an employer to offer employees funds to purchase care they wish. HRA funds are tax free to both the employer and employee and roll over year to year. 
     
  • Trump also expanded access to short-term, limited duration health insurance plans, allowing families and individuals to purchase these health plans for 12 months with a total of 36 months of renewability. These plans are exempt from Obamacare’s costly mandates and regulations, meaning more Americans will have access to affordable and flexible healthcare. As a result, these plans are expected to be 50 to 80 percent cheaper and will offer millions of Americans flexible care after several years of increasing premiums and narrowing choices in the Obamacare marketplace.
     
  • The Administration has also proposed allowing small businesses to band together and form association health plans (AHP). Like short-term plans, AHPs are exempt from many Obamacare regulations and give workers and employers increased flexibility to offer care. Democrats are currently holding this rule up in court, and the government is waiting for a ruling on its appeal. 
     

Going forward, the Trump Administration should continue working with the private sector to lower costs, increase efficiency, and open up the healthcare system for patients.

Photo Credit: Gage Skidmore


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