Biden’s student debt plan would repeal tax relief for business losses
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Law360 (April 9, 2020, 5:54 p.m. EDT) – Congress should reverse expanded business loss tax benefits enacted in latest coronavirus relief legislation to pay for immediate cancellation of at least $10,000 of debt of every student loan borrower in their next bill, former Vice President Joe Biden said Thursday.
Biden, the presumptive 2020 Democratic presidential nominee, said in an op-ed on Medium that his proposal to write off student debt would be paid for by reversing the “excessive business loss” tax cut passed with the help of , the Coronavirus Relief and Economic Security Act. It was the third coronavirus response bill that President Donald Trump has sign.
“This tax cut massively benefits the wealthiest Americans and is not needed to address current COVID-19-related economic relief efforts,” Biden said.
The law allows companies to carry forward losses from 2018, 2019 and 2020 for up to five years. Additionally, net operating losses will temporarily not be subject to a taxable income limit, meaning they can fully offset income.
Biden said a student debt forgiveness program like the one proposed by former presidential candidate Sen. Elizabeth Warren, D-Mass., would help working families during the downturn caused by the coronavirus pandemic. coronavirus.
“I believe that as we face what will likely be one of the most unstable and challenging economic times in this country’s recent history, we can take these critical steps to help workers join the two ends easier,” Biden said.
Student loan holders who attend public colleges and earn up to $125,000 a year would be eligible to have all of their debt forgiven “with appropriate incremental reductions to avoid a bluff,” Biden said.
Under his proposal, low-income earners earning less than $25,000 a year would face no monthly payments or accrued interest.
Biden said those making more than $25,000 a year would pay no more than 5% of their Discretionary Income for loan repayments. After 20 years, the remaining federal debt would be forgiven tax-free, according to the proposal.
Biden also proposed to further expand unemployment benefits, provide more funding to local and state governments to give healthcare workers the resources they need, and open the Health Insurance Exchanges Act. affordable care to those who may have lost employer-sponsored coverage.
Biden said he would announce further details on the proposed student debt cancellation soon, but did not provide a timeline.
His campaign did not immediately respond to a request for comment.
Warren’s proposed legislation, the Student Debt Relief Act, was introduced in July and would allow households earning less than $100,000 in adjusted gross income to receive a maximum of $50,000 in debt forgiveness. unique. These cancellations would not be taxed or treated as earned income. The adjusted gross income amount would be based on the most recent tax year.
Individuals earning up to $250,000 in adjusted annual gross income, or co-filers earning up to $500,000, would be eligible for partial debt forgiveness. The cancellation amount would be reduced by $1 for every $3 of earned income above $100,000, according to a summary of the bill.
–Additional reporting by Joshua Rosenberg and Stephen Cooper. Editing by Neil Cohen.
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