Sacrificing Stimulus by Backing Off Tax Provisions

By February 11, 2009Economy, Taxation

Bloomberg, “Congress Cuts Big Business Tax Break in Stimulus Bill“:

Feb. 11 (Bloomberg) — House and Senate negotiators all but eliminated the biggest tax cut for businesses in the compromise agreement on an economic stimulus bill, Senator Max Baucus of Montana said.

The provision, a top priority of business groups including the National Association of Manufacturers and the U.S. Chamber of Commerce, would let companies convert losses into tax refunds.

The provision is the “net operating loss” relief, enumerated as a priority for manufacturers in the NAM’s recent “Key Vote” letter on H.R. 1. More from the Bloomberg story:

Monica McGuire, senior policy director in charge of taxation for the manufacturers’ association, said omitting the provision would diminish the legislation’s stimulus effect.

What McGuire termed the “gutting” of the relief provision “doesn’t contribute to an effective recovery package,” she said. “Restoring adequate tax relief for struggling companies is about helping a diverse range of industries from manufacturing to retail; no plants, no workers.”

 

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