The Latest on the $5.5 trillion stimulus plan
The U.S. Department of Labor is preparing to release a $5 billion stimulus plan that could include a new tax on instruments.
The plan is expected to be unveiled next week, according to a government official, who spoke on condition of anonymity because the plan is not yet finalized.
The tax, which would apply to all musical instruments, is expected in a memo to be released on Monday by the Labor Department’s Office of Management and Budget.
It would also apply to some items such as wedding bands, wedding dresses, and even certain “electronic music” services.
The memo would be sent to lawmakers by the Office of Economic Policy, which oversees the agency.
It has not yet been sent to the White House or the Treasury Department, two federal agencies that typically have the power to issue such a tax.
While the tax is expected by many economists to have a modest impact on the economy, the memo does not include a specific dollar amount, the official said.
That means it would likely not be the centerpiece of the stimulus plan, which is currently under review by the House and Senate committees.
It is unclear how the tax would be levied, and it would be unclear whether the tax on the instruments would be indexed to inflation, the Treasury official said, speaking on condition that he not be identified because the document is still under review.
A similar tax, for example, was proposed last year by Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Speaker Nancy Pelosi (D-Calif.).
The proposal was struck down by the Senate Finance committee after it raised questions about how it would work, including whether it would take effect over time or how the Treasury would calculate the tax.
Under the new plan, however, the tax will be phased in over the next three years, rather than the three years that the current plan would allow.
The Treasury official would not say how the new tax would work.
However, the agency would provide a summary of the proposed tax, he said.