President Donald Trump and Congress should provide businesses with employee retention tax credits, which Congress has included in previous disaster relief packages to help companies hold on to their workforces, the group of executives from companies including Apple, Johnson & Johnson and Lockheed Martin said Wednesday. The credit could be based on the amount of wages companies pay to employees, they said in the letters, which were sent to congressional leaders and the president.
The executives also urged Congress to offer companies a payroll tax holiday, which they argued would give employers much-needed cash to preserve their workforces during the global outbreak of COVID-19, the disease caused by the virus. Delayed tax payment deadlines, which the Internal Revenue Service announced this week, would also help boost business liquidity, the Business Roundtable said.
Congress should consider reinstating net operating loss carrybacks, which were eliminated under the 2017 Tax Cuts and Jobs Act but would be helpful on a temporary basis to stem economic bleeding from the outbreak, the roundtable said. The government should extend the carryback period to five years, emulating what it did in 2002 and 2009 to stimulate the economy, the executives said.
Trump had previously expressed his support for a payroll tax holiday, but a relief deal in the works doesn’t currently include cuts to payroll taxes. A report from the Penn Wharton Budget Model found a holiday would cost $807 billion and do little to stimulate the economy, and the idea received blowback from Democrats who said payroll tax cuts would hurt funding for Social Security.
--Editing by Neil Cohen.
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