The top House Republican taxwriter supports accelerating tax breaks for certain industries in an upcoming coronavirus package to pump more capital into the economy and help weather the downturn.
House Ways and Means Committee ranking member Kevin Brady, R-Texas, told reporters June 12 that businesses in some industries will need capital to survive. A proposal being discussed by Senate Republicans would allow companies to use business tax credits this year that wouldn’t otherwise be available until future years.
Brady said such a plan would allow job creators to use capital when they need it. “This policy has merit — it wouldn’t in normal times, but we’re not in normal times,” he said. The plan could include credits for research and development, Brady said.
While small businesses were able to benefit from the Paycheck Protection Program, which was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) to provide businesses with a forgivable loan if they used the money to pay employees, Brady said it isn't enough.
Any proposal to accelerate tax credits for big businesses may get a cool reception from Democrats. Brady said that while he hasn’t had extensive discussions with Democrats, he expects resistance considering that the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800) would repeal a provision that allows businesses to carry back net operating losses before 2018. “Right now, we need to be pumping capital into Main Street businesses, especially to keep their workers alive economically,” he said.
Republicans and Democrats may be able to strike a compromise to encourage businesses to keep workers employed and hire more of them in the coming months. Brady said there's a way to make the employee retention tax credit created by the CARES Act work with his push to give bonuses to employees who return to work.
A bipartisan proposal to expand the employee retention tax credit was included in the HEROES Act, but Republicans have complained that supercharged unemployment benefits have deterred workers from returning. On June 1 Brady introduced the Reopening America by Supporting Workers and Businesses Act of 2020, which would provide returning workers with a $1,200 bonus.