A coalition of 233 national and local groups is asking Congress to repeal two changes to the tax code that were passed as part of coronavirus relief legislation and affect net operating losses.
The organizations wrote in a June 10 letter to Congress that provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P. L. 116-136) allowing businesses to carry back NOLs up to five years and eliminating the limitation on excess business losses were “costly tax hand-outs to wealthy business owners and corporations.”
The Joint Committee on Taxation found that the latter provision disproportionately aids high-income noncorporate taxpayers, with 81.8 percent of those making $1 million or more reaping the benefits. In total, the two provisions together are projected to cost over $160 billion over 10 years, according to the JCT.
“Coming as they do during an unprecedented national emergency of widespread suffering, these unwarranted tax breaks are particularly outrageous,” the groups wrote.
The AFL-CIO, the Main Street Alliance, and Americans for Tax Fairness are among the organizations that signed on to the letter.
House Ways and Means Committee member Lloyd Doggett, D-Texas, and Senate Finance Committee member Sheldon Whitehouse, D-R.I., have introduced legislation (H.R. 6579 and S. 3640) that would change both CARES Act provisions, but no further action has been taken.