- Jun 6, 2007
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America absolutely definitely needs a massive stimulus bill to stop the devastating harm from the corona-virus crisis. But America doesn't need a stimulus bill that has extreme manipulation of the American people in it which it is getting with the Senate version of the bill this chamber passed last night (by the way at 9:30 am Thursday the text of the bill still cannot be found on the Senate's website)! For the Section 2301 and accompanying provisions there is this extreme taking advantage of the American people. These sections deal with an initiative labeled "Employee Retention Credit For Employers Subject To Closure Due To Covid 19". I think what the American people think what is going on here is that if an American company acts like a stand up company and during this mandated government shut down over the Covid 19 virus keeps its employees on the payroll the Federal Government will significantly share that expense for the stand-up company with a refundable tax credit. What the American people are getting with the text of this Senate bill is companies can cut eighty percent, whatever massive percentage one wants to pick, and still get this credit for the employees they keep on the payroll which by the way reasonable people know such businesses are only keeping the few employees kept for their own self interested reasons like restaurants that keep a small crew on for their take out business. What Congress is doing here is rewarding businesses whose character is, everything is all business with us, employees are equivalent to tangible assets, like pieces of equipment if you don't add to the bottom line we get rid of you; the real salt in the wounds aspect to this is that the fifty, sixty or whatever percent of employees cut by the employer since they are part of the body of U.S. taxpayers are ultimately going to be paying the monies this employer gets from the Federal government through this refundable tax credit program. At minimum the Congress if they are doing their job at all should limit this program to employers that at least keep sixty percent of their employees on the payroll, make the program have as its actual purpose the purpose members of Congress and the Executive Branch represented to the American people it would have!
This Senate bill has a provision in it that in a general sense is okay but it needs to be limited to stop a grave abuse of the American system. What I am referring to here is Sec. 2303 "Modifications For Net Operating Losses" what this provision does is allows a business that has a loss for this year which of course will be many businesses and big losses for quite a few to apply some of those losses against prior years income so to lower the tax bills for prior years for such a business so that the respective business can get an injection of money from the over payment of taxes for the prior year. The principle is good because America wants its businesses to have good balance sheets so it can stay in business and grow and employ a lot of people which this policy promotes; this general policy is especially good now because a lot of businesses are going to be staggeringly hurt because of the economy shut down stemming from the Covid 19 crisis and this will enable them to get their hands on cash so they can survive! The problem that I have with this is that a lot of businesses will not be on the brink of survival from this Covid 19 crisis the issue will be how profitable will these businesses be this year and I am worried about manipulation of the U.S. corporate tax code in the area of "net operating loss carrybacks" so these companies get a huge tax break at the expense of America's finances which everyone knows that with a twenty-two trillion dollar national debt the American people are experiencing a lower standard of living because of this situation. I am not a tax expert and maybe I am missing the mark here but I am worried that businesses will just start dramatically writing down the value of their assets whether it be physical offices and plants or intangible assets like goodwill and intellectual property. I don't think America is talking about chump change here for many businesses that operate in America we are talking about asset write downs near and exceeding a billion dollars per individual taxpayer. I think to protect the financial interests of the American people for this year and next year asset write downs should be limited to a ten percent reduction per year; this would reduce any taking advantage of this situation reduce any gaming of the system because the economy may be in shambles today but if the country is lead well in two years the economy should be recovered and overall business assets in America should be at minimum in the ball park they were at before the current crisis!
This Senate bill has a provision in it that in a general sense is okay but it needs to be limited to stop a grave abuse of the American system. What I am referring to here is Sec. 2303 "Modifications For Net Operating Losses" what this provision does is allows a business that has a loss for this year which of course will be many businesses and big losses for quite a few to apply some of those losses against prior years income so to lower the tax bills for prior years for such a business so that the respective business can get an injection of money from the over payment of taxes for the prior year. The principle is good because America wants its businesses to have good balance sheets so it can stay in business and grow and employ a lot of people which this policy promotes; this general policy is especially good now because a lot of businesses are going to be staggeringly hurt because of the economy shut down stemming from the Covid 19 crisis and this will enable them to get their hands on cash so they can survive! The problem that I have with this is that a lot of businesses will not be on the brink of survival from this Covid 19 crisis the issue will be how profitable will these businesses be this year and I am worried about manipulation of the U.S. corporate tax code in the area of "net operating loss carrybacks" so these companies get a huge tax break at the expense of America's finances which everyone knows that with a twenty-two trillion dollar national debt the American people are experiencing a lower standard of living because of this situation. I am not a tax expert and maybe I am missing the mark here but I am worried that businesses will just start dramatically writing down the value of their assets whether it be physical offices and plants or intangible assets like goodwill and intellectual property. I don't think America is talking about chump change here for many businesses that operate in America we are talking about asset write downs near and exceeding a billion dollars per individual taxpayer. I think to protect the financial interests of the American people for this year and next year asset write downs should be limited to a ten percent reduction per year; this would reduce any taking advantage of this situation reduce any gaming of the system because the economy may be in shambles today but if the country is lead well in two years the economy should be recovered and overall business assets in America should be at minimum in the ball park they were at before the current crisis!
