Tucked in among more than 5,000 pages of legislative text, the congressional bill providing Covid-19 relief and 2021 government funding includes dozens of tax breaks for beneficiaries ranging from downtown restaurants and the film industry to motor-sports racetracks.
And many of the benefits will stick around long after the pandemic is over. Besides granting temporary tax credits to help businesses cover the cost of payroll, the bill gives benefits for wind and solar projects and creates a permanent tax break for beer brewers, wine makers and liquor distillers.
Also included is a favorite of President Donald Trump: a write-off for wining and dining business clients.
The inclusion of nearly 80 tax-related provisions in the bill represents an age-old strategy in Washington for many lawmakers and the lobbyists who try to influence them: Attach your favorite tax break to a large, must-pass bill where a couple of extra write-offs won’t stop the momentum toward passage.
Covid-19 relief became the vehicle in 2020, with lawmakers rushing to complete an assistance package and wrap it up with regular appropriations for federal agencies to keep them running through next September.
Unknown Cost
The $2.3 trillion spending bill, released Monday afternoon, is 5,593 pages. The House is expected to vote first, with the Senate planning to take the bill up by day’s end.
The total cost of the tax-break bonanza is not yet known. Because the legislation was introduced just hours before the expected votes, Congress’s nonpartisan scorekeeper, the Joint Committee on Taxation, won’t have time to publish an estimate of the total of all the credits, deductions and special preferences before the bill likely becomes law.
The legislation expands the deduction for business meals -- including delivery and carry-out -- for 2021 and 2022, a change that Trump has pushed for months and Congress ignored until recently.
Trump, whose business holdings include resorts and golf courses, has plugged an expansion of the measure to let businesses fully write off the costs as a way to help restaurants struggling with the pandemic. Companies up to now can write off 50% of the costs, based on an item included in Trump’s 2017 signature tax cut.
Unrelated Measures
Economists have argued that many of the tax breaks would do little immediately to spur economic activity. That’s because most sporting events are closed to fans, concert halls have largely been shuttered amid social distancing guidelines and few businesses are conducting face-to-face meetings with clients.