Coronavirus Stimulus check 2 update: Tax cuts instead?

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If you’re looking for an update on stimulus check number 2, there’s good news and bad news. The bad news is that there might not be a second round of IRS stimulus checks, per say. However, the good news is that lawmakers could make it up to you by offering attractive tax cuts that are just as good, if not better than, a second round of stimulus checks.

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Update: instead of stimulus check 2

In an opinion piece for Fox Business, Rep. Jim Banks outlined five things he would like to see the Senate include in its phase 4 stimulus package. This update on stimulus check 2 suggests a number of tax cuts that could end up being even better than a second round of checks.

Two of the taxes that may be of most interest to taxpayers are the self-employment tax and payroll tax. Banks proposes ending the self-employment tax because it would enable small businesses to hire more workers. He said now it is more important than ever to create more jobs, and small business owners would be able to do it if they didn't have to pay the self-employment tax.

The other tax he wants to get rid of is the payroll tax, although it would be a temporary suspension. This would help all workers, whether they are self-employed or working for someone else. It also incentivizes people to get back to work after having received more on unemployment than what they received on the job. Banks argues that suspending the payroll tax is a better option than a second round of IRS stimulus checks because people have to be earning a paycheck to benefit.

Other possible provisions in the phase 4 stimulus package

The Republican representative also suggests making the tax cuts enacted two years ago permanent. He said taxpayers shouldn't have to worry about a tax increase in the middle of a recession and a pandemic.

Banks also suggested ending the death tax, noting that families who have lost a loved one from COVID-19 don't have to experience extra punishment by having to pay the death tax. He said eliminating the tax will remove a significant financial burden from families who are grieving.

Banks also called on Congress to "empower President Trump to unilaterally suspend burdensome regulations on businesses, charities, educational institutions and other employers. He noted that the Food and Drug Administration has utilized the Emergency Use Authorization to speed up the development of coronavirus drugs.

Banks added that because better treatments have been developed, the death rate for those infected with COVID-19 was down some 40% between March and April. He added that suspending regulations can work in other sectors as well. He said last year small businesses paid $1,500 per employee to comply with federal regulations. Lifting those regulations can enable them to hire more employees.

Could these provisions work better than stimulus check number 2?

Those who are looking for an update on whether there will be a stimulus check 2 are hoping for more money to be put in their pockets, but there is more than one way to do that. Banks cited a couple of examples that showed tax cuts such as the ones he suggested will do a good job at lifting the economy out of a recession.

He noted that in 2013, then-Governor Mike Pence enacted the biggest state tax cut in Indiana's history to drive the state out of the Great Recession. The tax cuts pushed the state's unemployment rate down to 3.5% by August 2017.

He also said that in the year and a half following the 2017 federal tax cuts, households saw their real disposable personal income rise by more than $5,200. GDP also climbed, while unemployment reached record lows. The Trump administration estimated last year that its deregulatory efforts will save households more than $3,000 annually.

Is a second round of IRS stimulus checks likely?

It remains to be seen whether a second round of IRS stimulus checks will make it into the phase 4 stimulus package. Banks' proposals read rather like a conservative wish list, while Republicans have criticized the House's HEROES Act as essentially a liberal wish list.

The reality will likely be somewhere in between these two lists. Democrats usually don't favor a lot of tax cuts or deregulation. As far as an update on stimulus check 2, it seems unlikely that there will be a second round if all these tax cuts are included. However, more checks wouldn't be needed if taxes are cut significantly.

Coronavirus stimulus check 2 update: where Congress stands

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Many people are constantly looking for an update on coronavirus stimulus check number 2. Congress still hasn’t passed a phase four stimulus package, and little progress has been made on it despite the House’s passing of one. There is a ray of hope as far as an update on coronavirus stimulus check number 2, however.

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Coronavirus stimulus check number 2 update: what's the holdup?

The House of Representatives passed a stimulus package that would provide checks of up to $1,200 per adult and $1,200 per dependent, but the Senate hasn't done anything with it yet. The good news is that Senate Majority Leader Mitch McConnell now says Congress will "probably" have to pass a phase four coronavirus stimulus package to deal with the fallout from the pandemic.

The fact that this statement comes from the leader of the Senate is particularly good news because it could mean there will be some movement on the phase four stimulus package passed by the House. However, the Republican-run Senate may have no plans to pass the Democrat-led House's bill.

Instead, the Senate may work on its own stimulus package so that more of the things Republicans want are included in it. If the Senate does look at the House's bill, it may end up being gutted because it includes many things Republicans disagree with.

One thing both parties may agree on is that a second round of coronavirus stimulus checks is needed. However, there is likely to be a great deal of political wrangling before a phase four stimulus package passes both houses of Congress and makes it to President Trump's desk.

What might be in a phase four stimulus package?

According to CNBC, McConnell, a Republican from Kentucky, said any phase four coronavirus stimulus package they pass will have a much narrower scope than the bill passed by the House. He said the progress made by states on reopening their economies in the next several weeks will impact what they decide to do.

He also said the next few weeks will help them determine whether there should be a phase four stimulus package. So far, Congress has passed four bills to deal with the fallout from the pandemic, with the fourth bill being tagged as "phase 3.5."

McConnell did not provide an update on whether there will be a coronavirus stimulus check number 2 as part of any phase four package they might pass. He did say he would push for protection from liability for businesses and doctors as states reopen their economies.

He also mentioned something Democrats want to see, which is aid for state and local governments. However, he wants the aid to cover only increased expenses and lost revenue caused by the fallout from the pandemic. The House's bill included $1 trillion in aid for state and local governments.

Disagreement on unemployment

He added that they need to ensure that they have "unemployment insurance properly funded for as long as" is needed. Tens of millions of people have been out of work due to the pandemic, and it will take some time before everyone is back at work. Unemployment was at 14.7% last month.

McConnell's mention of unemployment suggests Democrats and Republicans could come to agreement on it, an issue that previously was only the interest of Democrats. The House's package extended the extra $600 in weekly unemployment pay until January, although McConnell said as recently as last week that they will not extend the extra $600, which currently expires at the end of July.

Republicans don't want to incentivize people to stay home from work because the extra money means they get paid more for staying home than going to work. McConnell's comment this week suggests the Republicans might be willing to do something on the unemployment front, but it's unclear just what or how long the extra aid might last.

Update on how much coronavirus stimulus check number 2 might be

Those looking for an update on coronavirus stimulus check number 2 will be happy to know that the Senate may include direct payments to households in its package, even if it starts from scratch instead of using the House's bill. The Trump administration and key Republicans have indicated a willingness to include a second round of coronavirus stimulus checks in the next package.

The first round of coronavirus stimulus checks included payments of $1,200 per adult and $500 per dependent up to age 16. Older dependents who were claimed on someone else's tax return were not eligible to receive payments. If the Senate starts from scratch, it would be reasonable to expect a similar plan for direct payments.

There's a key reason to expect the update for coronavirus stimulus check number 2 to also be $1,200, and it's not because the first round of checks was. 11 Alive pointed out that a month's worth of salary at the federal minimum wage of $7.25 per hour amounts to $1,160. When you round that up, you get $1,200.

An accountant told the news outlet that many things are based on minimum wage, so this makes sense. He also said the $500 per child could be based on the child tax credit, which started at around that level in the 1990s.