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The COVID relief bill contains the most insane tax giveaway I, frankly, have ever heard of.
Stay with me.
Millions of companies got PPP loans to keep employees paid & pay rent & utilities.
Those loans are mostly grants. They won’t have to be repaid.
—> https://www.nytimes.com/2020/12/22/us/politics/whats-in-the-covid-relief-bill.html?referringSource=articleShare
Stay with me.
Millions of companies got PPP loans to keep employees paid & pay rent & utilities.
Those loans are mostly grants. They won’t have to be repaid.
—> https://www.nytimes.com/2020/12/22/us/politics/whats-in-the-covid-relief-bill.html?referringSource=articleShare
2/ That’s what everyone understood.
And Congress said back in the spring that PPP money would not be counted as income for tax purposes.
Makes sense — they point was to give companies money to pay pressing costs, which would immediately help employees, landlords, utilities.
And Congress said back in the spring that PPP money would not be counted as income for tax purposes.
Makes sense — they point was to give companies money to pay pressing costs, which would immediately help employees, landlords, utilities.
3/ Everyone understood that too.
But the insane provision comes in Monday’s bill.
Big companies wanted to be able to deduct that spending from their taxes as ‘deductible business costs’ — as you would in a routine year.
But THEY DIDN’T PAY THE COSTS! We did — the taxpayers.
But the insane provision comes in Monday’s bill.
Big companies wanted to be able to deduct that spending from their taxes as ‘deductible business costs’ — as you would in a routine year.
But THEY DIDN’T PAY THE COSTS! We did — the taxpayers.
4/ But the bill lets anyone who got PPP money as a grant pretend those costs were paid in the routine course of business & deduct them.
Of course, many many small & midsize businesses are barely surviving—PPP loans were a critical lifeline.
It’s big businesses that win.
Of course, many many small & midsize businesses are barely surviving—PPP loans were a critical lifeline.
It’s big businesses that win.
5/ You only benefit from more deductions if you owe taxes.
If you’re barely surviving, the deductibility of costs you didn’t actually pay is irrelevant.
But what about big companies like law firms or other companies that got loans but also thrived in the pandemic?
Bingo!
If you’re barely surviving, the deductibility of costs you didn’t actually pay is irrelevant.
But what about big companies like law firms or other companies that got loans but also thrived in the pandemic?
Bingo!
6/ They get a huge 2020 bonus — deducting as their own ‘costs’ money that was a gift.
It’s like eating dinner at a high-end restaurant, and having the bill covered by the government.
Then demanding to be paid $20 an hour for preparing the meal.
That you didn’t cook—& ate free.
It’s like eating dinner at a high-end restaurant, and having the bill covered by the government.
Then demanding to be paid $20 an hour for preparing the meal.
That you didn’t cook—& ate free.
7/ That’s how these ‘tax code benefits’ work for the rich & take money from everyone else.
This is one we can see, understand, and watch pass in real time.
(Mnuchin objected to it!)
Makes no logical or economic sense.
Benefits people who don’t need it.
Costs everyone else.
This is one we can see, understand, and watch pass in real time.
(Mnuchin objected to it!)
Makes no logical or economic sense.
Benefits people who don’t need it.
Costs everyone else.
8/ Merry Christmas to the best off — while tens of thousands wait in lines for boxes of food (from their fellow citizens…not their gov’t).
This isn’t what Trump objected to, by the way.
But it’s exactly what happens when you draft ‘crisis’ legislation in secret on deadline.
This isn’t what Trump objected to, by the way.
But it’s exactly what happens when you draft ‘crisis’ legislation in secret on deadline.
9/ Here’s the NYT story on what is in the pandemic relief bill.
We should be able to do these important bills without turning them into ‘Secret Santas’ loaded with gifts for those who don’t need them. https://www.nytimes.com/2020/12/22/us/politics/whats-in-the-covid-relief-bill.html?referringSource=articleShare
We should be able to do these important bills without turning them into ‘Secret Santas’ loaded with gifts for those who don’t need them. https://www.nytimes.com/2020/12/22/us/politics/whats-in-the-covid-relief-bill.html?referringSource=articleShare
