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U.S. mining lobby in push to preserve tax break repealed by Democrats - Metro US

U.S. mining lobby in push to preserve tax break repealed by Democrats

Chairman Chuck Grassley, (R-IA), holds up a gavel during a Senate Finance Committee hearing on "COVID-19/Unemployment Insurance", in Washington

WASHINGTON (Reuters) – The U.S. mining industry is spearheading a lobbying effort to protect a $160 billion pandemic tax break after congressional Democrats largely repealed the provisions in their recent stimulus bill, according to emails and a letter seen by Reuters.

The tax provision folded into the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act in March has been criticized by Democrats and public advocacy groups as a stealth giveaway for the wealthy. Its exact provenance in the legislation and which interested parties advocated for it remain unclear.

On Monday, more than 70 industry associations wrote to Chuck Grassley, chairman of the Republican-led Senate finance committee on taxation and his Democratic counterpart Ron Wyden, raising concerns that “some in Congress are seeking to reverse these changes” and urging the senators to leave them in place.

“The tax and liquidity provisions in the CARES Act are helping to ensure that the severe economic situation created by COVID-19 do not become even worse,” the groups wrote.

While that letter was signed by more than 70 groups representing industries from farming and architects to banks and insurers, it was drafted and organized by the National Mining Association (NMA), according to emails seen by Reuters.

In a statement, an NMA spokeswoman said the group regularly works with dozens of associations across multiple industries and that the tax break was “significant to many who are working to minimize the impacts of the economic downturn and limit job losses.”

The tax measures went largely unnoticed until April when the nonpartisan Congressional Joint Committee on Taxation finalized its cost estimate of the measures and who would benefit.

The measures would reduce federal tax revenues by $160.5 billion over 10 years, with $135 billion of that due to easing so-called noncorporate loss limitations, the committee said. It also found that the noncorporate provision would overwhelmingly benefit roughly 43,000 people who make more than $1 million a year.  

Brian Reardon, president of Washington-based small business lobby group the S Corporation Association, which signed the letter seeking to protect the new tax measure, confirmed that the NMA organized the effort.

The NMA spokeswoman said the association, which represents a raft of mining, exploration and coal groups from across the country, supported the measure’s inclusion in the CARES Act. Senate records show the association lobbied on the legislation.

The CARES tax language eased rules on carrying back net operating losses to give companies and individuals a quick cash injection. It allowed corporations a five-year carryback for net operating losses generated in 2018, 2019, or 2020, and suspended for 2018, 2019, and 2020 a limit on excess business losses for noncorporate taxpayers which had been imposed in 2017.

In its latest stimulus package, the HEROES Act, the Democratic-led House of Representatives has repealed the noncorporate tax breaks and limited the corporate carryback period to 2018 and 2019, according to an analysis by Americans for Tax Fairness. The Senate has yet to move on new stimulus legislation.

Wyden’s office did not immediately respond to a request for comment.

The CARES tax breaks were originally drafted by Grassley’s staff on the Senate finance committee, according to four people with knowledge of the matter, including two Democratic aides. Grassley has defended the measures, saying they did not seek to pick winners and losers.

Michael Zona, a spokesperson for Grassley, did not provide comment on the letter on Tuesday, but said of the tax break: “We received thousands of emails and calls with no way of reviewing all of them. The provision wasn’t done for any specific industry.”

(Additional reporting by Chris Prentice; Editing by Tom Lasseter and Tom Brown)

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