IRS stimulus check update: Is a second round in the cards?
Those looking for an update on a second round of IRS stimulus checks may be disappointed. Although there has been plenty of talk about a second stimulus check for everyone, lawmakers may not be inclined to do it.
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For now, the big problem seems to be division about how to proceed with the next and possibly last phase of stimulus.
Division in the ranks
White House adviser Peter Navarro said in an interview with Fox Business last week that President Donald Trump wants the phase four stimulus package to cost over $2 trillion and focus on increasing manufacturing jobs. However, there seems to be some disagreement about that statement, according to The Washington Post.
Officials who spoke on the condition of anonymity told the Post that he “went rogue.” They said Navarro speaks only for himself and not for the Trump administration in general. However, Navarro said in a later interview that anyone who opposes the view of “Buy American” or supporting the manufacturing industry in the U.S. “are in the wrong administration.”
The Post said Treasury Secretary Steven Mnuchin has been working with House Speaker Nancy Pelosi and coming up with stimulus packages that emphasize what Democrats want more than what Republicans want.
Update on whether the phase four package will include stimulus checks
Three sources reportedly told the Post that several GOP lawmakers want Vice President Mike Pence or Chief of Staff Mark Meadows to take a larger role in the stimulus negotiations. The Post said the White House hasn’t come up with a proposal for the phase four stimulus package because different advisers are offering sometimes contrasting ideas.
Some ideas that have been floated by White House officials include stimulus for the manufacturing industry, infrastructure spending, and a fix for the extra unemployment benefits that resulted in people getting paid more while out of work than while on the job.
Trump has also expressed interest in passing a payroll tax cut, reducing the capital gains tax and a vacation credit of up to $4,000 to stimulate the domestic tourism industry. However, the White House has not developed a concrete plan for any of these ideas, and many lawmakers seem to have dismissed them.
IRS stimulus check update: what experts say
Federal Reserve Chairman Jerome Powell and other officials have been calling for more stimulus, although the latest updates have shown that they’re not necessarily looking for a second round of checks. CNBC spoke to a number of experts for an update on a second round of IRS stimulus checks.
House Democrats want to see a second round of stimulus checks amounting to $1,200 per adult and $1,200 per dependent of any age. However, Senate Democrats and Republicans want to target the phase four stimulus package more closely to those who need assistance the most.
Most economists don’t support a second round of IRS stimulus checks, although they do admit that more stimulus is necessary. Columbia Business School Finance Professor Stijn Van Nieuwerburgh told CNBC that stimulus checks aren’t very well targeted toward those who need them the most.
Purdue University Associate Professor of Economics Kevin Mumford told the news outlet that one other issue with a second round of stimulus checks is how expensive it is. Additionally, many people who don’t need the checks tend to save the money, so it doesn’t do anything to stimulate the economy. He went so far as to call stimulus checks “a drag on the economy.”
Economists say lawmakers should target future stimulus efforts toward those who need it the most. Mumford suggested that lawmakers determine who needs the money the most by comparing this year’s earnings with last year’s income. Only individuals whose earnings declined would receive a stimulus check.
Another suggestion is to provide the checks as short-term loans. People would receive money now, but then they would have to pay it back at tax time next year if they didn’t qualify to receive the money.
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Original Article Posted at : https://www.valuewalk.com/2020/06/coronavirus-irs-stimulus-check-update/