Economic Well-Being, A Blown Deadline, And Faster Rebates

Americans hated the economy in 2021 but loved their own financial situation. A new Federal Reserve Board survey, taken last Fall, found that 78% of the households it surveyed said they were either “doing okay” or “living comfortably,” the highest level since the Fed first took the survey in 2013. Many positive responses came from households that received increased and advanced Child Tax Credit payments. The Fed took the survey just as inflation was beginning to accelerate.

Minnesota lawmakers miss their budget deadline. They agreed on $4 billion in tax breaks over the weekend but failed to agree on spending plans by Sunday night. Gov. Tim Walz now must call the legislature back in special session to complete its work. The three-year budget agreement would exempt all Social Security income from state income tax, a tax cut of more than $1.5 billion. The plan also includes $350 million in property tax reductions,  and increases the child and dependent care tax credit. 

Coloradans will receive tax rebates a year ahead of schedule. Gov. Jared Polis announced tax rebates of $500 for individuals and $1000 for joint filers will be delivered this summer “because there’s no reason the government should hold onto your hard-earned money any longer than it has to.” Rebates are possible thanks to the Colorado Cash Back Bill the legislature passed last year. 

Who can suspend Maryland’s gas tax increase? The tax is due to increase on June 1 based on inflation measured by the Consumer Price Index. GOP governor Larry Hogan says only Comptroller Peter Franchot can halt the increase. Franchot, who happens to be running for the Democratic nomination for governor, says only Hogan can do it. Both say this year’s increase should be suspended.  

A bigger EITC in Michigan? Business Leaders for Michigan, an industry trade group, wants the state to increase its Earned Income Tax Credit (EITC) as part of a strategy to make it one of the top 10 states for doing business. Right now, Michigan is ranked 29, according to its annual benchmarking study

But also in Michigan: A triple-tax for Turo car-sharers? A package of bills in the House could “triple tax” users of Turo, a peer-to-peer sharing service akin to Airbnb, but for car owners. Two bills would assign liabilities, record-keeping, and add taxes for an owner of a shared vehicle. The bills would also require owners to carry insurance and face fleet registration taxes, local excise taxes, and other use taxes.

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].

https://www.taxpolicycenter.org/daily-deduction/economic-well-being-blown-deadline-and-faster-rebates