WASHINGTON (NEXSTAR) — Democrats on Capitol Hill say they want a tax cut included in the federal coronavirus stimulus package repealed after learning that the majority of those who benefit are millionaires, but Republicans are defending the tax provision, arguing it helps businesses facing financial turmoil.
“It’s just morally reprehensible,” Sen. Sherrod Brown, D-Ohio, described what he called a “millionaire tax giveaway” in the CARES Act.
He and fellow Democrats, along with about 200 other organizations around the country, say the tax break will cost the federal government billions in tax revenue, which they say is critical during a time when that money is needed to help vulnerable Americans.
“This is a moment where people ought to be called to their patriotic duty … to help their neighbors,” Rep. Dan Kildee, D-Mich., said.
Kildee said the tax cut was supposed to help business owners struggling during closures meant to help slow the spread of the coronavirus.
But the nonpartisan Congressional Joint Committee on Taxation found more than 80% of the break goes to Americans who make more than $1 million yearly. The committee’s analysis found about 43,000 millionaires qualify for the break and each will save about $1.6 million annually.
“Every dollar that they take is a dollar that’s not available to help a small business stay afloat or to keep somebody from losing everything that they’ve earned,” Kildee said.
Republicans argue the break was necessary to save the economy.
“The key was for businesses was to keep cash on hand if they hadn’t already filed or to get refunds to give them the liquidity to keep the doors open,” Sen. Chuck Grassley, R-Iowa, said on the Senate floor.
He said the tool is not new.
“Maybe (Democrats) should think about President (Barack) Obama’s support for this kind antirecessionary fiscal policy,” Grassley said.
Frank Clemente, the executive director of progressive tax reform advocate Americans for Tax Fairness, said Grassley is right, but noted a few caveats:
“There is a history of this tax break, but not the amount of years they’ve allowed and not as tailored as it is to exclusively wealthy people,” Clemente said.
He said the debate in Congress should focus on the economy, not politics.