How Republicans’ tax overhaul might make a recession worse

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How Republicans’ tax overhaul might make a recession worse

Designed to forestall them from having to put off employees or shut down fully, it enabled cash-strapped companies to get tax refunds by redoing t


Designed to forestall them from having to put off employees or shut down fully, it enabled cash-strapped companies to get tax refunds by redoing their earlier 12 months’s taxes to have in mind their present losses.

Republicans lower that again, although, to assist finance the Tax Cuts and Jobs Act, and that call is now coming again to hang-out lawmakers as eating places, airways, cruise traces and myriad different companies face mounting losses from clients staying residence within the wake of the coronavirus pandemic.

“It’s a large downside,” mentioned Alan Viard, an economist on the conservative-leaning American Enterprise Institute. “It’s a foul function of the TCJA.”

“Unexpectedly, it’s develop into extra salient and necessary.”

It’s an instance of how the 2017 overhaul can look very completely different relying on the financial backdrop.

When it was signed into legislation, the economic system was sturdy and far of the eye was on lawmakers’ large lower in company tax charges – a giant deal when corporations are making a lot of cash.

But when the economic system contracts – which specialists say is more and more doubtless because of the novel coronavirus — the company price received’t matter a lot as a result of companies that don’t make any cash don’t pay any…



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