Democrats Push Back Against Tax Corrections in Virus Aid Bill

Senate Democrats are pushing back against including technical corrections to the 2017 tax law that would benefit multinational companies, including Coca-Cola, restaurants, and retailers in a broader coronavirus aid package.

Senate Finance ranking member Ron Wyden (D-Ore.) told reporters on Friday that a fix to the attribution of foreign investments of private equity firms and multinationals, which the 2017 law inadvertently hiked taxes on, is “a complete non-starter for us on our side.”

“I think the administration will have a very tough time trying to defend that. A, it has nothing to do with Covid-19, and B, it’s just fundamentally unfair,” Wyden said.

Wyden, Finance Committee Chairman Chuck Grassley (R-Iowa), Treasury Secretary Steven Mnuchin, and other negotiators are meeting Saturday with the hopes of completing the rescue package with the goal of teeing it up for a final vote in the Senate early next week.

The Republican proposal for a Covid-19 rescue package included a fix to the calculation of overseas investments for U.S. companies, which primarily affects companies with foreign subsidiaries. Senate Republicans also included fixes to an inadvertent exclusion of business property improvement, like renovations, from a provision meant to allow businesses to immediately deduct the cost of major expenses.

Fixing both issues has bipartisan support in Congress, with Rep. John Lewis (D-Ga.) the lead sponsor of legislation to partially shield companies from the added tax burden on their foreign holdings. But technical corrections to the law carry political baggage due to the party-line vote Republicans used to pass the reform in 2017. Democrats have sought to trade corrections like the one to allow businesses to immediately deduct the cost of property renovations for increased tax credits to low-income filers, or increased tax benefits for renewable energy production.

Wyden, Finance Committee Chairman Chuck Grassley (R-Iowa), Treasury Secretary Steven Mnuchin, and other negotiators are meeting Saturday with the hopes of completing the rescue package for businesses and workers with the goal of teeing it up for a final vote in the Senate early next week.