The provision, included by Senate Republicans, would cost taxpayers approximately $90 billion in 2020.
More than 80 percent of the benefits of a tax change tucked into the coronavirus relief package Congress passed last month will go to those who earn more than $1 million annually, according to a report by a nonpartisan congressional body expected to be released Tuesday.
The provision, inserted into the legislation by Senate Republicans, temporarily suspends a limitation on how much owners of businesses formed as “pass-through” entities can deduct against their nonbusiness income, such as capital gains, to reduce their tax liability. The limitation was created as part of the 2017 Republican tax law to offset other tax cuts to firms in that legislation.
Suspending the limitation will cost taxpayers about $90 billion in 2020 alone, part of a set of tax changes that will add close to $170 billion to the national deficit over the next 10 years, according to the Joint Committee on Taxation (JCT), the nonpartisan congressional body.
The provision has fueled criticism by congressional Democrats and some tax experts who have called it a giveaway to the wealthy and real estate investors, who frequently face large losses on their investments. Conservatives have said enacting the limitation was a mistake in the 2017 law and suspending it gives badly needed liquidity during the economic downturn caused by the coronavirus pandemic by reducing their tax obligations…
To read the entire article from The Washington Post, click https://www.washingtonpost.com/business/2020/04/14/coronavirus-law-congress-tax-change/?utm_campaign=wp_to_your_health&utm_medium=email&utm_source=newsletter&wpisrc=nl_tyh&wpmk=1
