Yesterday Just the News posted an article about the tax increases hidden in the recently passed Covid Relief Bill.
The article reports:
There is more than $57 billion worth of hidden tax increases in President Joe Biden’s $1.9 trillion coronavirus stimulus bill, Just the News has learned.
The final version of the legislation expands the number of employees who are covered by the $1 million limitation on the deductibility of executive compensation.
According to National Law Review, section 162(m) of the tax code “generally prohibits a public company from deducting more than $1 million in compensation paid to a current or former covered employee in a taxable year,” and under current law “the covered employees are the chief executive officer, chief financial officer, and the three other highest compensated officers for the taxable year.”
The executive compensation deduction change in the stimulus bill covers 5 more of a company’s highest paid employees.
“TCJA [Tax Cuts and Jobs Act] included such a limit, but Dems essentially doubled it to make it more draconian,” a House Ways and Means Committee minority spokesperson said. “Dems are under no illusions that their bill is about growth, so them putting a cap on executive pay is just political messaging.”
A $500,000 limit on the amount of losses that “passthrough corporations” can use to get liquidity is also tucked inside the bill, according to a Joint Committee on Taxation document obtained by Just the News.
The Joint Committee on Taxation spokesman also noted that the above provision that the Democrats have ended was what allowed small businesses to get the fast tax refunds from the IRS that kept many of them alive during the lockdowns.
The article continues:
Another tax provision in the stimulus, the second largest rescue package in U.S. history, involves new limitations on the interest expenses that multinational corporations can deduct on tax returns.
This change makes doing business in America less attractive and will return us to the days when American corporations moved overseas.
Aside from the cost of the Covid Relief bill, it is a bill that will stifle the growth of the American economy. That growth would have at least provided some of the money needed to fund the bill. We are headed back to the days of very slow economic growth or no growth at all.