From the Wall Street Journal, “Stimulus’s Winners and Losers”
WASHINGTON — Home builders, new-car buyers and manufacturers are among the major winners in a $838 billion economic-rescue bill passed in the Senate Tuesday while state governments and generously paid corporate executives will be the losers.
The Senate’s economic stimulus package contains several major amendments and saw an overhaul last week when Senate Democrats agreed to changes pushed by Sens. Susan Collins (R., Maine) and Ben Nelson (R., Neb.).
Manufacturers, home builders and firms in other sectors that were unprofitable in 2008 and 2009 would gain the ability under the Senate bill to turn their losses into tax refunds. The bill allows them to use those losses to offset tax liability as far back as 2003.
The Senate provision is slightly more generous than a similar 5-year net operating loss carryback provision in the House bill. It would allow firms to carry back 100% of losses, while only 90% of losses would be eligible for the 5-year carryback under the House bill.
“Manufacturing is general is a cyclical industry, so net carryback loss is very important,” said Dorothy Coleman, vice president of tax and domestic economic policy at the National Association of Manufacturers. “Typically any industry that is cyclical would benefit from this.”
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