The coronavirus disease 2019, better known as Covid-19,
has elicited both a public health dilemma and economic crises in the United States and globally. The pandemic has caused havoc in the hospitals’ capacities and brewed economic slowdown. By September 2020 there were more than 6.5 million confirmed cases of the ferociously spreading pandemic. In the US, the death then stood at 195,000 according to the consistent survey performed by Johns Hopkins University. Today according to the same source, the cases stand at 51.5 Million printing an image of the most dangerous viral disease to ever grace humanity. The keynotes taken from the pandemic are that the health system and the economies throughout are still vulnerable, and they call for space for improvement in any slightest chance.
The nature of the spread of the virus demarcated clear geographical distinction with most populated areas (especially in the urban) having the most infections. The densely populated zone then spread the virus to the sparsely populated zones. The assertion is backed up by the data which showed that the US coastal regions (very densely populated) led with the infection rate. Another interesting feature is that COVID-19 had differential effects among various racial and ethnic outfits.
The U.S economy is one of the largest and diverse economies in the world. This is especially boosted by the highly advanced manufacturing, research, and world-class development. Prior to the coronavirus pandemic, the US economy was growing enormously resulting from the slashing of some taxes and economic regulation burdens. The arrival of the novel coronavirus pandemic greatly affected the US economy causing a massive economic deceleration. The pandemic resulted in unemployment, decrease industrial production, slump sales, disruption of the chain of supply, and strong impacts on international trade. The Bureau of Labor and Statistics reported a spike in the unemployment rate to 6.9% in October 2020. The number of reported unemployed American citizens was reported to have spiked to 11.1 million.
The COVID-19 regulations had stopped individuals from looking for jobs due to the abysmal economic prospects. Most companies had to cut off a huge number of their employees for them to be in line with the COVID-19 protocols set aside by the U.S government. This meant that the economic value of these companies had to reduce due to the shortage of labor and skills especially in the sectors that require the physical presence of employees. As of August 2021, the unemployment rate has reduced with the bureau reporting a total of 8.3 million unemployed citizens. This number however is still massive compared to the 5.8 million people prior to the pandemic. The main player that drives the US economy is the consumers. More consumers’ spending means more profits to businesses and an advancing economy. Consumer spending sank to a shocking 3.9% which is the worst record since 1932.
The high rate of unemployment means that these consumers are unable to spend more and thus companies and businesses cannot flourish. This resulted in the economy collapsing into an economic recession in February 2020. The U.S stock fell by 37% in March from an overvalue of 58% in February that year. The real GDP of the U.S decreased by 3.5% in 2020 from 2019 which is the worst drop reported since 1946, with nearly 3.1 trillion going into relief money provided by the government to the impoverished citizens. the economic supply chain was disrupted especially due to the lower number of working employees. Most retail businesses had closed due to the poor supply of retail products from production companies. The closure of borders from most countries allied to the U.S on international trade resulted in the decline of some firms which deal exclusively with exports and imports and was unable to withstand the vast effects of the pandemic.
As the nation heals from the economic bruises infected by the pandemic, the concept of taxation is important. Many firms and households are looking to rebuild their businesses. If you are an entrepreneur, these policies affect your business in various ways. However, you need not worry because Simpletax got you covered.
SIMPLETAX offers services such as individual tax preparation to help you file your taxes, and get you the maximum refund you deserve, and business tax preparation to boost your business' financial health by tracking income and expenses and categorizing them to increase awareness and productivity time.
Other services such as accounting, and bookkeeping are also being provided to ensure the growth of your business!
Whether you are running a small business or own a large enterprise, you need to have taxation experts to help you deal with this critical matter. Reach out to us to have a sustainable solution for all your taxation problems.
We are here to help you out!
Cepal, N. (2021). United States economic outlook: 2020 in review and early 2021 developments.
Connaughton, J. E., & Depken II, C. A. Covid-19 and the North Carolina Economy.
Komlos, J. (2021). The Actual US Unemployment Rate in 2019 Was Twice the Official Rate and the Phillips Curve. Challenge, 64(1), 51-74.
Davis, S. J., Liu, D., & Sheng, X. S. (2021). Stock prices, lockdowns, and economic activity in the time of coronavirus (No. w28320). National Bureau of Economic Research.