Meanwhile, small businesses are struggling to access bailout money.
Senate Republicans snuck in a $135 billion tax giveaway for the wealthiest in the same law that gave working people in my home state of Connecticut and around the country checks of $1,200 or less. The $135 billion tax break is a giveaway for millionaire real estate developers and hedge fund managers. Meanwhile, small businesses across our state still cannot access relief.
It is unconscionable. House Democrats are joining with the public to demand that Congress repeal and rescind this Republican giveaway immediately.
We passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the third congressional package providing relief for the COVID-19 pandemic, to provide $100 billion in much-needed support to hospitals and other health care providers, to give $150 billion of equally-needed funding to state, local, and tribal governments, and to establish the Paycheck Protection Program to get small businesses and their employees through this crisis. I strongly support those provisions.
But, as the New York Times reported in late March, “Senate Republicans inserted an easy-to-overlook provision on page 203 of the 880-page bill that would permit wealthy investors to use losses generated by real estate to minimize their taxes on profits from things like investments in the stock market.”
The nonpartisan Joint Committee on Taxation estimated the cost of the giveaway to be $135 billion over the next 10 years. Over 80% will go to those earning more than $1 million in income.
And there are no strings attached: no requirement that wealthy recipients use the windfall to retain employees, no requirement they use it to respond to or recover from the pandemic, and no requirement they show they lost money because of the pandemic. It can be for losses that investors have not yet settled from years before.
Meanwhile, many small businesses still cannot access the new Paycheck Protection Program, which Congress established to get local business owners and their workers to the dawn of the coronavirus recovery. Nearly 80 have contacted my office—from New Haven, from Milford, from Prospect, from Seymour. The roadblocks they’ve faced go beyond just getting enough funding; some banks are prioritizing bigger businesses with bigger applications—and thus bigger fees. The $135 billion Congress handed to real estate developers who don’t need it would have been much better going to in-need local businesses.
We must repeal and rescind this Republican giveaway. I am cosponsoring legislation from Rep. Lloyd Doggett and Sen. Sheldon Whitehouse that will do just that. And I have sent a letter to congressional leadership, cosigned by more than 60 House Democrats, demanding action.
There is precedent for righting this wrong. In 1997, a $50 billion tax break for tobacco companies was slipped into comprehensive budget legislation right before it passed. Only after President Clinton signed the law did we discover the giveaway. The public demanded action, and we repealed it the next month.
During this pandemic, there are many in Connecticut and the rest of the U.S. who should be getting Congress’s immediate attention. Wealthy real estate developers and hedge fund managers are not among them.
Rosa DeLauro is the U.S. representative from Connecticut’s 3rd District.
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