Phase IV COVID Relief Shouldn’t Be Tax Cuts 2.0
For Immediate Release
In response to the unprecedented economic crisis caused by the coronavirus (COVID-19) pandemic, lawmakers have enacted three pieces of legislation that will provide a combined $2.5 trillion of economic relief and support. Actions so far have mostly been timely, temporary, and reasonably well-targeted and tailored to the current crisis. However, discussions of a “phase IV” of economic relief appear to be far less focused. Recent overtures from the President and his economic team suggest a growing interest in pushing for tax cuts and other measures that have little to do with the current crisis. The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
This is a national emergency, not the time to pursue “Tax Cuts 2.0.” Setting aside short-term deficit concerns in order to avoid a depression doesn’t mean we should spend or reduce taxes for whatever one might want.
The $2.3 trillion CARES Act certainly wasn’t perfect, but there was much to applaud in that it was reasonably well-targeted and enacted with impressive speed. Following it up with a laundry list of ill-timed tax cuts would be an unfortunate step backwards that could undermine the fidelity of the whole effort.
We’re hearing discussion on everything from payroll tax cuts, to deductions for business meals and entertainment, capital gains tax cuts, and expansion of the use of immediate write-offs for capital investments. There may be a place for versions of some of these ideas later on once the pandemic is addressed and the focus can shift to economic recovery. But taken together, it’s pretty clear this is just a back-door effort to pursue further tax cuts on top of the 2017 Tax Cuts and Jobs Act.
Our national debt was already on an unsustainable trajectory prior to the coronavirus, and the current crisis means that reckoning will come much sooner. If we do borrow more, it should be as part of a laser-focused effort to stabilize the economy and public health situation to combat this current crisis head on.
We can’t waste time on tax ideas that don’t belong in the current discussion or don’t really belong at all.
For more information, please contact John Buhl, director of media relations, at email@example.com.