February 26, 2021

Volume XI, Number 57

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Grassley: “Targeted Tax Relief” Being Considered to Counter Economic Effects of Coronavirus Spread

As the novel coronavirus (COVID-19) continues to spread globally and the number of cases in the U.S. grows, attention on Capitol Hill has shifted to potential legislative responses aimed at combatting the outbreak and addressing its impact. Last week, the House and Senate passed and President Trump signed into law an $8.3 billion supplemental funding package (H.R. 6074) to provide additional funding to the Department of Health and Human Services, Small Business Administration, and other Departments and agencies to combat the virus.

With that bill now signed into law, attention has shifted to other measures that may be necessary to aid individuals and industries most impacted. In this regard, policymakers have been considering potential short-term tax policy changes that could shore up investor and consumer confidence after two volatile weeks on Wall Street. On Monday, Senate Finance Committee Chairman Chuck Grassley (R-IA) was said to be weighing “targeted tax relief measures.” Although specifics are not yet available, a spokesman for the Chairman said that “[s]everal options within the committee’s jurisdiction are being considered as we learn more about the effects on specific industries and the overall economy.” The remarks came as news emerged that the White House and the Department of the Treasury were working on a measure to address the economic impact of the coronavirus.

At this point, one or more of various proposals could be considered. Previously, President Trump has raised the idea of a payroll tax cut to stimulate consumer spending in the short term. Other Trump Administration officials have discussed tax policy changes, such as deferred taxes, that are targeted at specific industries particularly harmed by the economic effects of the coronavirus, such as the travel and tourism industries. Still other policymakers have discussed making permanent certain provisions from 2017’s Tax Cuts and Jobs Act, accelerating certain deductions, and creating short-term credits to aid businesses amid interruptions caused by the virus. It is unclear what actions, if any, the Trump Administration would be able to take without Congressional action. House Ways and Means Committee Chairman Richard Neal (D-MA) has raised the possibility of working with the Administration on an infrastructure package that could include certain expanded family credits supported by Democrats. Others have questioned whether tax policies are the proper approach. In a joint statement, House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) criticized any approach that would constitute “new tax cuts for major corporations,” saying instead that actions such as paid sick leave for employees and measures to combat price gouging are needed.

Discussions will likely continue in the coming days on Capitol Hill and in the Administration regarding additional responses to the spread of the coronavirus. 

Senate Continues Consideration of American Energy Innovation Act

This week, the U.S. Senate will continue its consideration of the American Energy Innovation Act (S. 2657), bipartisan legislation introduced by Senators Lisa Murkowski (R-AK) and Joe Manchin (D-WV) that would aim to move the country toward a green energy future. The 555-page legislation combines nearly 50 energy-related provisions. At this point, it appears unlikely that an amendment, proposed by Senate Finance Committee Ranking Member Ron Wyden (D-OR), that would extend various tax incentives for electric vehicles, wind and solar power, and battery storage, among other provisions, will be adopted. The underlying bill is still expected to garner support from members of both parties in the Senate. In the House, however, Democratic leaders have indicated that rather than take up the legislation, they intend to continue working to develop the separate green energy legislation under consideration in that chamber since late 2019.

Hearings

No tax-related hearings are scheduled at this time.

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Copyright 2020 K & L GatesNational Law Review, Volume X, Number 70
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Mary Baker Burke, KL Gates Law Firm, Tax Attorney
Government Affairs Advisor

Mary Burke Baker is a government affairs advisor in the Washington, D.C. office. Mary focuses on federal tax matters affecting businesses—including domestic and multi-national corporations and all types of pass-through entities—and individuals. Her practice covers tax policy, tax reform, regulatory and other guidance, tax administration and technical tax issues, with particular emphasis on the OECD and the European Union, accounting methods, energy and medical device issues, and FBAR compliance matters for individuals.

Mary consults with and...

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Karishma Page, KL Gates Law Firm, Public Policy Attorney
Partner

Based in Washington, D.C., Karishma Shah Page is a member of K&L Gates’ Public Policy and Law Practice. Ms. Page concentrates her practice on federal legislative and regulatory policy, focusing on tax, financial services, retirement, health care, and employee benefits issues. Ms. Page has extensive experience working on a variety of tax legislation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, retirement legislation, the Affordable Care Act, and related rulemaking and regulatory activity.

Ms. Page develops and implements a...

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William Kirk, KL Gates Law Firm, Tax and Financial Services Attorney
Partner

Bill Kirk, a partner at K&L Gates, represents clients before Congress and Executive Branch agencies with emphasis on tax, financial services, corporate and transportation and infrastructure matters. Mr. Kirk’s clients include public and private entities such as major corporations and national trade associations for whom he provides policy analysis and strategic advice and engages in advocacy with the Congress and Executive Branch agencies. He also has significant experience representing emerging and middle market firms on legal and policy matters (e.g., minority and...

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Christopher J. Valente K & L Gates, Boston, complex civil litigation, commercial disputes, financial services, insurance coverage
Associate

Christopher Valente is an associate in the firm’s Boston office. Mr. Valente represents clients in state and federal courts throughout the United States and focuses on complex civil litigation in the areas of commercial disputes, financial services and insurance coverage. He has significant experience managing all stages of complex civil litigation from inception through trial.

Mr. Valente has litigated cases involving a broad range of commercial and business-related issues, including claims of fraud, securities fraud, defamation, breach of fiduciary duty, breach...

617.951.9071
Nicholas Leibham, KL Gates, Public Services and Finance Attorney
Partner

Nick Leibham is a partner in the firm’s Washington, D.C. and Orange County offices. Mr. Leibham is part of the innovation law and policy group and spearheads the emerging technologies practice within the group, which includes a multi-disciplinary portfolio of clients and matters. He principally advises clients that have a substantial interest in the federal government as a market place. This includes aspects of federal funding and business development initiatives, procurement, public-private partnerships, regulatory matters and rule makings, tax issues, and company wind-...

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