The coronavirus relief package going through Congress currently includes almost $600 billion in tax cuts over the next decade, according to a new analysis by the Joint Committee on Taxation.
The JCT, a nonpartisan committee within Congress, showed in a report Thursday that the coronavirus legislation will cause a massive drop in tax receipts for the federal government this year of over $700 billion, or a 20% reduction. Receipts will fall another $254 billion in 2021 before rising again in 2022.
A majority of the $600 billion comes from tax breaks within the bill, such as one allowing companies to delay paying payroll taxes. JCT’s analysis showed businesses using this measure to delay paying $350 billion in payroll taxes over the next two years. Most of this will get paid back to the government in the coming years.
The most expensive tax item in the legislation is the provision to send millions of people a direct cash payment, worth $1,200 for every adult and $500 for each child. This will cost approximately $292 billion. A measure to give companies the payroll tax grant for keeping their workers employed would cost another $54.5 billion.
Another part of the bill, which would cost approximately $200 billion, allows companies to qualify for a refund by applying their current losses to the previous year’s taxes.
[Click here for complete coronavirus coverage]
The U.S. federal budget deficit currently exceeds $1 trillion and isn’t expected to decrease anytime soon.
The Congressional Budget Office, another nonpartisan entity that calculates the cost of legislation, has not released its budget estimate of the relief package yet.
The bill was approved on Wednesday night in the Senate and is expected to be voted on in the House on Friday. President Trump is expected to sign it into law early next week.
