A group of Democratic lawmakers is urging congressional leaders to forgo accelerating tax credits for businesses in the next coronavirus package and instead focus on targeted relief for families.
In a July 2 letter to Senate and House leadership, more than 100 Democrats said that aid to state and local governments would stimulate the economy better than business tax breaks.
The lawmakers who signed the letter, led by Senate Finance Committee member Sherrod Brown, D-Ohio, and House Ways and Means Committee member Lloyd Doggett, D-Texas, argue that struggling corporations have access to the $500 billion Federal Reserve fund and already benefited from the Tax Cuts and Jobs Act in 2017.
“Part of why large businesses seek refundability or what they call monetizing their tax credits is because so many corporations have little or no tax liability following the historic deficit-financed giveaways they received under the Trump tax law,” the letter says.
Republicans have discussed the possibility of accelerating business tax credits in the next coronavirus relief package to help companies improve cash flow. But Democrats said the next package should instead help low-income taxpayers by expanding refundable tax credits like earned income and child tax credits. That has long been a goal for Democrats, who have urged further expansion of refundable credits during the pandemic.
In an April 30 letter to Senate leaders, a group of Democratic senators said the EITC and the child tax credit are proven and effective tools for improving the financial stability of workers and their families.
Democrats in the July 2 letter also questioned comments made by President Trump’s economic adviser Larry Kudlow on further slashing the corporate tax rate for companies returning their operations to the United States. Kudlow suggested in May that the administration was looking at cutting the corporate rate to 10.5 percent for companies that “onshore” their supply chains.
The Senate is expected to work on a pandemic relief bill when it returns from its two-week Independence Day recess. Democrats have been urging Republicans to negotiate a new package after the House passed the Health and Economic Recovery Omnibus Emergency Solutions Act (H.R. 6800) in May.