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1 1 (March 20, 2020)

handle is hein.crs/govcavw0001 and id is 1 raw text is: Researh Sevice Targeted Tax Relief for Industries Impacted by the Coronavirus: Selected Policy Issues March 20, 2020 One of the policy options being considered to minimize the damage to the U.S. economy from the domestic spread of the coronavirus is tax relief targeted at industries that have experienced substantial drops in revenue. To date, growing numbers of cruise lines, airlines, hotels, restaurants, retailers, and energy producers seem to have been hit the hardest by the economic impact of the virus. Depending on what happens to the spread of the coronavirus within the United States in coming weeks, other industries could be similarly affected. The prospect of a prolonged domestic coronavirus outbreak raises concerns about the solvency of severely affected companies and the job security of their employees. This is a particular concern for smaller firms. Without lines of credit, many of them may find it difficult to stay in business. According to the Congressional Budget Office, fiscal policies for reviving a slumping economy can be evaluated on the basis of their timing and cost-effectiveness. Timing refers to the period when a fiscal stimulus would have the greatest effect. Cost-effectiveness refers to the cumulative growth in output and jobs created by a particular stimulus measure per dollar of budgetary cost. Timely and cost-effective fiscal stimulus measures are seen as recommended ways to boost an economy at a relatively low revenue cost. The same considerations may be useful in assessing the potential benefits from proposals to provide federal tax relief for industries directly affected by the coronavirus pandemic. Lawmakers may want to focus on proposals that would be likely to deliver the maximum benefit when it is most needed, at a relatively low revenue cost. Tax Policy Options There are several policy options for granting federal tax relief to U.S. industries that have been hit hard by the coronavirus pandemic. One option is to defer payment of federal employment, income, and excise taxes by eligible companies for a period that coincides with the time it takes for the coronavirus outbreak to run its course. Most companies are required to deposit the federal income, Medicare, and Social Security taxes they withhold from employees' paychecks biweekly or monthly with the U.S. Treasury Department. At the moment, it is unclear how long it will take for the current outbreak to run its course. Congressional Research Service https://crsreports.congress.gov IN11263 CRS INSIGHT Prepaed for Membeivs and Cornm ittees o4 Co q _gress ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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