Covid-19 Economic Impact

[Edmond Hausfrau]

Can anyone provide clarity on the tax filing issue. Initially it was still must file extension on April 15, and 90 days up to a million owed, allowed without penalty or interest accrual.
Now I am seeing that you do not have to file the extension at all and that July 15 will become the new filing date. This is for federal, not Oklahoma.
Mnunchin is sometimes hard for me to follow. Hoping someone understood it better than me.

[Jersey Boss]

This is why we should all be furious at the complete failure of our federal government. They should be leading on getting medical equipment (like masks, production of more ventilators, etc.; long term vaccine work) and testing! It's not until these things are in place can we really get back to life. If we get back to life there will be a dramatic and overwhelming jump in cases, but also a lot of fear... people aren't going to risk their lives. They need more assurances and tests and masks provide that.The people who test positive quarantine and those who didn't can go to work with precautions (continue social distancing). Once people have masks we can go in public more. Want businesses to open? Pressure our federal government to use their power to get us there.

But the voice of the federal government is decrying that the federal goverment is not a shipping Clerk and the Governors need to do more.

[BoulderSooner]

Can anyone provide clarity on the tax filing issue. Initially it was still must file extension on April 15, and 90 days up to a million owed, allowed without penalty or interest accrual.
Now I am seeing that you do not have to file the extension at all and that July 15 will become the new filing date. This is for federal, not Oklahoma.
Mnunchin is sometimes hard for me to follow. Hoping someone understood it better than me.

yes the federal deadline to file is now July 15th

i bet most if not all states follow suit ...

[gopokes88]

One thing that hasn't been mentioned...

Oklahoma is unique in that our municipalities -- including OKC -- rely almost exclusively on sales tax.

Obviously, that is going to plummet for the foreseeable future. We are going to have huge issues with just funding basic services like police and fire; this is very different than cities in other states.

Yeah............... I have a friend that told me right now it's probably a 60% or so drop.

These events change behaviors, it won't come roaring back.

[Pete]

And the sales tax issue funding OKC is not just a faucet you can turn back on.

Even in the best-case scenario, things are not going to bounce back for years.

[gopokes88]

And the sales tax issue funding OKC is not just a faucet you can turn back on.

Even in the best-case scenario, things are not going to bounce back for years.

"You can't overreact"

Sure feels like we overreacted

[HangryHippo]

"You can't overreact"

Sure feels like we overreacted

It's going to be brutally painful and hopefully Oklahoma leadership learns some very valuable lessons. That being said, there are no good choices at this point. You can't just carry on as if nothing is different.

[OKC Guy]

One thing that hasn't been mentioned...

Oklahoma is unique in that our municipalities -- including OKC -- rely almost exclusively on sales tax.

Obviously, that is going to plummet for the foreseeable future. We are going to have huge issues with just funding basic services like police and fire; this is very different than cities in other states.

I’m not a big tax guy but we need to look at raising the gas tax while prices are dirt cheap. Could offset some of the loss. Could grandfather it based on gas prices and once gas goes up to a set price the tax decreases in stages based on increased gas costs. If gas goes up a lot then our economy will be better meaning more sales taxes and less need for gas tax. But it has to have auto triggers so its not permanent but solely based on gas prices.

[Pete]

The Dow is now down over 500 points and frankly, I can't believe it's not already much lower.

I don't think anyone is comprehending how bad our economy will be hurt, and even if we come out of this soon, it will take years to recover.

[gopokes88]

Latest GDP estimates show a 25% contraction in Q2.
If Q3 was say -15%. It would easily qualify for a depression.

The state of Oklahoma will have to make budget cuts so deep 2015 feels like a nice sunny 70 degree day, and that's with massive tax increases.
The city of Oklahoma City would have to either file for bankruptcy or beg the state to change laws so they can get a more stable form of tax revenue. Such as property or income.

It won't be a V shape recovery it will be an L shaped with the leg slightly sloping upward. Business' will not "go back to normal". Imagine getting stabbed in the stomach while on a jog and everyone saying, ah well you'll go back to normal. No you won't. You'll always live a little different.
That's best case.

[OKC Guy]

Latest GDP estimates show a 25% contraction in Q2.
If Q3 was say -15%. It would easily qualify for a depression.

The state of Oklahoma will have to make budget cuts so deep 2015 feels like a nice sunny 70 degree day, and that's with massive tax increases.
The city of Oklahoma City would have to either file for bankruptcy or beg the state to change laws so they can get a more stable form of tax revenue. Such as property or income.

It won't be a V shape recovery it will be an L shaped with the leg slightly sloping upward. Business' will not "go back to normal". Imagine getting stabbed in the stomach while on a jog and everyone saying, ah well you'll go back to normal. No you won't. You'll always live a little different.
That's best case.

Latest GDP forecast from Goldman:

Q1: -6%
Q2: -24%
Q3: +12%
Q4: +10%

2020: -3.1%

[Pete]

^

It seems only owners of small- and medium-sized businesses are comprehending what is happening here.

The big boys will be fine; they have resources and reserves.

But the majority of people in this country are paid (and get health insurance through) smaller companies. And almost all those jobs are already gone and the large majority will not be in a situation to hire them back for quite some time.

Using census data, the WSJ calculated that 36.2 percent of people worked at either a large (2,500 to 9,999 people) or very large (10,000 or more people) company, versus 38.9 percent who worked for small (100 or fewer people) companies and 24.9 percent who worked for mid-sized (100 to 2,499 people).

[OKC Guy]

TARGET RAISING PAY BY $2 AN HOUR UNTIL AT LEAST MAY 2nd

[BoulderSooner]

^

It seems only owners of small- and medium-sized businesses are comprehending what is happening here.

The big boys will be fine; they have resources and reserves.

But the majority of people in this country are paid (and get health insurance through) smaller companies. And almost all those jobs are already gone and the large majority will not be in a situation to hire them back for quite some time.

i would say that some "big boys" will be fine ....

some entire industries are going to be crushed ... Hotels for instance ..

[Pete]

The government should be focusing on getting trillions of SBA loans ready NOW.

Otherwise, many businesses will close and it will be too late to bring them back.

And then you are talking about a decade or more before things would be able to return to what they were just a month ago.

[Pete]

i would say that some "big boys" will be fine ....

some entire industries are going to be crushed ... Hotels for instance ..

Right, but there are already actions in place to prop up certain industries, and those all dominated by big companies.

We have 40% (!) of all people in this country employed by businesses with less than 100 people. I own one and we are not coming back from this without a loan (don't need a gift) and we'll need it within 90 days. Otherwise, we turn of the lights and let everyone go, and we can't just restart.

[gopokes88]

Here comes the credit crunch

https://www.cnbc.com/2020/03/20/clea...e-sources.html

[Pete]

Dow closed down over 900 points.

People are just now starting to understand the economic catastrophe that is at hand.

We are watching our economy die in real time.

[jdizzle]

Dow closed down over 900 points.

People are just now starting to understand the economic catastrophe that is at hand.

We are watching our economy die in real time.

Good thing I am only 29, and am not retiring for a long time. Short-term, it will be crippling. But it is not dying. The economy will rebound. It has before, and will again. Especially since an oil war is probably coming, and we all know war is great for the economy (see WW2, which solely made the US the top economy in the world) as morbid as that sounds.

[Pete]

^

I'm not saying forever; I'm saying for years to come.

And for those of us with significant investments (businesses, investments, etc.) you can't just replace that.

[gopokes88]

And when Pete says years to come he means 8-12. Which is how long it took post 2008. Trump helped some and has done nice thing, but overall it just takes time to heal the wounds that deep recessions cause.

[jdizzle]

^

I'm not saying forever; I'm saying for years to come.

And for those of us with significant investments (businesses, investments, etc.) you can't just replace that.

True. The short-term will be hard to recover from!

[Edmond Hausfrau]

I do think OKC will take a hard look at how it raises funding for the city. As many have previously argued on this forum, sales tax as a primary funding source for infrastructure is not great for long-term stability. Placing more of the tax burden on property and more corporate backed bonds might be in our future.

[OKC Guy]

It won’t happen but what if:

We diverted the MAPS4 tax for 2 years put into a fund for 0% interest loans for small businesses in need. Then when we buy local we increase taxes which in turn helps local small business. I think we get $100m per year in that tax so maybe $75m in next year. We could use future anticipated tax now to immediately help. Lots of red tape like how this might hurt banks but hire a panel of pro’s to debate and decide worthiness. If we keep small business alive we are gonna get more taxes back in long run.

Pipe dream I know, just thinking out loud

[chuck5815]

It won’t happen but what if:

We diverted the MAPS4 tax for 2 years put into a fund for 0% interest loans for small businesses in need. Then when we buy local we increase taxes which in turn helps local small business. I think we get $100m per year in that tax so maybe $75m in next year. We could use future anticipated tax now to immediately help. Lots of red tape like how this might hurt banks but hire a panel of pro’s to debate and decide worthiness. If we keep small business alive we are gonna get more taxes back in long run.

Pipe dream I know, just thinking out loud

That would definitely be a better way to spend the money than on most of the goofy pet projects that made the final list.