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Republicans and Democrats finally stopped squabbling long enough to spend an estimated $2 trillion on what they claim is emergency coronavirus relief. Here’s the good, the bad, and the ugly of the bill.The Good:1. Payroll Tax DeferralEmployer-side payroll tax payments are suspended through the end of the year, to be paid half by year-end 2021 and half by year-end 2022. This will increase business liquidity by about $700 billion.While I would have preferred a cut to a deferral, this will significantly lessen the near-term tax burden on business payrolls, encouraging businesses to retain and restore jobs.(Treasury has already announced a deferral of corporate income taxes under existing authorities.)2. More Federal Reserve MoneyThe Federal Reserve’s new lending facility is funded with up to $425 billion, which will be levered to provide up to $4 trillion in liquidity to distressed businesses.3. Net Operating LossesFive-year carryback for tax years 2018, 2019, and 2020, for corporations and pass-through businesses as well. This will allow this year large expected losses to be carried back for substantial refunds.4. Qualified Investment Property FixFixes the so-called “retail glitch†for qualified investment property (QIP), allowing investments in QIP improvement to commercial buildings—flooring, lighting, fixtures, etc.—to qualify for bonus depreciation.The glitch forced a 39-year recovery for such investments, and fixing it has been a top priority of restaurants and retailers.5. Exemption for Distillers to Produce Hand SanitizerDistillers were made exempt from alcohol excise taxes for the alcohol used to produce hand sanitizer.(Continues at the Federalist)
