A group of Democrats has introduced a bill to undo business tax provisions in coronavirus relief legislation that have been at the center of controversy.
The relief package President TrumpDonald John TrumpBiden vows to recognize Armenian genocide if elected president Nadler presses Barr over Trump using emergency powers during pandemic China dispatched team to North Korea to advise on Kim Jong Un: report MORE signed late last month, known as the CARES Act, included provisions that loosened rules relating to businesses’ net operating losses (NOLs). Republicans argue that the provisions allow businesses to have more cash flow that they can use to retain their employees during the coronavirus crisis. But many Democrats argue that they are too generous to wealthy business owners.
Rep. Lloyd DoggettLloyd Alton DoggettOver 150 House Democrats call on party leaders to keep Medicaid protections in next relief package Trump’s trade policy under fire amid scramble for virus supplies Business tax provisions in coronavirus relief law spark controversy MORE (D-Texas) and Sen. Sheldon WhitehouseSheldon Whitehouse13 senators join Harris letter urging Mnuchin to exempt coronavirus checks from private debt collection The Hill’s Morning Report – Presented by Facebook – Will Trump’s plan to reopen the economy work? Business tax provisions in coronavirus relief law spark controversy MORE (D-R.I.) have been leading the Democratic criticism of the provisions, and on Friday they rolled out legislation to undo them and create a new provision that is designed to be more targeted to smaller businesses.
“Tax giveaways for a wealthy few shouldn’t have come near a coronavirus relief bill. Relief legislation ought to address the needs of small businesses and workers, not fleece taxpayers to benefit real estate moguls and hedge fund billionaires,” Whitehouse said in a statement. “By repealing these special interest giveaways, we can free up billions of dollars for federal assistance our communities and economy so desperately need.”
Doggett and Whitehouse’s bill would repeal a provision in the CARES Act that removed a limitation on the amount of business losses owners of non-corporate businesses could use to offset their non-business income. The Democrats’ bill reinstates the limits of $250,000 for an individual and $500,000 for a married couple.
The Joint Committee on Taxation (JCT) estimated, in an analysis requested by Doggett and Whitehouse, that the vast majority of the tax cuts from the CARES Act provision would go to households with income of at least $1 million. JCT has also estimated that the CARES Act provision costs about $135 billion over 10 years.
“This provision isn’t about coronavirus, working families or small businesses struggling to stay afloat,” Doggett said. “It is just more insider politics to get millions to those who have millions, especially real estate investors and hedge fund managers. Repealing this giveaway will free resources needed to help those truly in need.”
The Democrats’ bill also would replace another provision in the CARES Act relating to NOLs — which allows businesses to carry back losses generated in 2018, 2019 or 2020 for up to five years — with a new provision that is narrower.
Doggett and Whitehouse’s bill would allow companies with less than $15 million in receipts to carry back losses generated in 2020 for up to two years. Companies that qualify would be able to apply to get an advance refund of up to $100,000 in order to receive money more quickly. Companies that have engaged in significant stock buybacks would not be able to utilize the provision.
A number of Democratic lawmakers have co-sponsored Doggett and Whitehouse’s bill, including Sen. Sherrod BrownSherrod Campbell BrownDemocrats urge Treasury to ensure Social Security recipients quickly receive full coronavirus rebates 13 senators join Harris letter urging Mnuchin to exempt coronavirus checks from private debt collection Hillicon Valley: Pentagon IG could not determine if White House interfered in cloud contract | Amazon firings fuel controversy over virus response | States begin shifting to mail-in voting | Agencies warn of North Korean cyber threats MORE (Ohio) and Reps. Jamie RaskinJamin (Jamie) Ben RaskinDemocrats roll out national plan to reopen America Hillicon Valley: House Dems push for B in state election funds | Amazon suspends over 6,000 sellers for price gouging | Google says 18M malicious coronavirus emails sent daily House Democrats push hard for mail-in voting funds MORE (Md.), Rosa DeLauroRosa Luisa DeLauroBiden’s health plan falls short — here’s how to fix that Hospitals fear being shortchanged in coronavirus funding Overnight Health Care: Trump calls report on hospital shortages ‘another fake dossier’ | Trump weighs freezing funding to WHO | NY sees another 731 deaths | States battle for supplies | McConnell, Schumer headed for clash MORE (Conn.) and Steve CohenStephen (Steve) Ira CohenMemphis congressman asks Tennessee, neighboring states to issue shelter-in-place orders Centrist Democrats insist Sanders would need delegate majority to win Clinton advises checking your voter registration during Trump’s State of the Union MORE (Tenn.).