Friday, March 20, 2020
Tax Foundation, Tax Options For Economic Relief During The Coronavirus Crisis:
As policymakers consider ways to provide relief during the public health crisis and economic downturn, tax policy can provide a set of tools to increase stability for both individuals and businesses.
Instead of simply reaching for fiscal stimulus with the goal of increasing economic activity, tax policy changes can give vulnerable individuals and businesses additional liquidity and space to survive the reduction in economic activity needed in light of the coronavirus outbreak. This reduces the impact of the economic downturn and public health problem in the short term while decreasing the amount of time needed to rebound once the crisis ends.
Each of the options below can be combined with policy proposals that provide economic support beyond the tax code and are separate from the White House proposal to suspend or cut the payroll tax. Each of these tax options have costs and trade-offs.
Temporary tax policy, while providing short-term relief, may not make sense in the context of normal conditions, and each policy change should be revisited when the crisis is over.
For complete TaxProf Blog coverage of the coronavirus, see here.