Democrats and left-leaning groups are criticizing provisions in coronavirus relief legislation relating to the tax treatment of business losses.

Legislation President Trump Donald John TrumpUS reimposes UN sanctions on Iran amid increasing tensions Jeff Flake: Republicans 'should hold the same position' on SCOTUS vacancy as 2016 Trump supporters chant 'Fill that seat' at North Carolina rally MORE signed late last month, known as the CARES Act, made several tax changes relating to businesses’ net operating losses (NOLs) — reversing restrictions imposed by Republicans’ 2017 tax-cut law. The CARES Act provisions were aimed at providing businesses with more cash flow so that they can better manage the coronavirus crisis.

But some Democrats have been arguing that the provisions in the legislation provide businesses with tax benefits that are too broad, and that one provision in particular is a boon for the wealthy.

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“Even someone who believes that Congress could loosen these laws to help businesses deal with the crisis would have to come to the conclusion that the CARES Act went way too far,” said Steve Wamhoff, director of federal tax policy at the left-leaning Institute on Taxation and Economic Policy.

The CARES Act eases several restrictions on NOLs. For example, it allows NOLs that businesses generated in 2018, 2019 or 2020 to be carried back for up to five years. The 2017 tax law had eliminated NOL carrybacks, and prior to that law, businesses could carry losses back up to two years.

Additionally, the CARES Act temporarily removes restrictions, created by the 2017 tax law, on the amount of losses that can offset income in a given year. It does away with a general restriction that NOLs can only offset 80-percent of taxable income in a year, as well as a second limitation that owners of noncorporate businesses known as “pass-throughs” can only use NOLs to offset a maximum of $250,000 of non-business income for a single filer, or $500,000 for a married couple filing jointly.

The provisions relating to NOLs have been in the CARES Act since Senate Republicans released an initial version of the legislation. The Senate unanimously passed the CARES Act, while the House passed the package by voice vote.

A proposal House Democrats released during the negotiations over the CARES Act also included five-year carrybacks of NOLs and suspension of the 80-percent restriction, but it disqualified some businesses from the relief and did not include repeal of the cap for pass-through owners.

Since the passage of the CARES Act, Democrats’ frustration with the NOL provisions has been growing. Their attention may have been drawn to the provisions after a New York Times article described the removal of the restriction for pass-through owners as “a potential bonanza for America’s richest real estate investors.”

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Two Democrats who have been playing a leading role in raising concerns about the provisions are Sen. Sheldon Whitehouse Sheldon WhitehouseLWCF modernization: Restoring the promise Restaurant owner defends calamari as 'bipartisan' after Democratic convention appearance Warren calls on McConnell to bring Senate back to address Postal Service MORE (D-R.I.) and Rep. Lloyd Doggett Lloyd Alton DoggettTrump order on drug prices faces long road to finish line Trump signs new executive order aimed at lowering drug prices Overnight Health Care: Fauci says family has faced threats | Moderna to charge to a dose for its vaccine | NYC adding checkpoints to enforce quarantine MORE (D-Texas), who each serve on congressional committees with jurisdiction over tax policy.

The Washington Post first reported Tuesday that the Joint Committee on Taxation (JCT), Congress’s nonpartisan tax scorekeeper, provided an analysis to Whitehouse and Doggett that found that the vast majority of the benefit of the provision benefiting pass-through owners would go to people with incomes of at least $1 million. The JCT report is dated April 9.

JCT had previously estimated that the pass-through provision would lower federal revenue by about $170 billion over 10 years, making it the second most expensive tax-related provision in the CARES Act, after the coronavirus relief checks being sent to most Americans.

Doggett and Whitehouse responded to the JCT report by calling for repeal of the pass-through provision.

“This analysis shows that while Democrats fought for unemployment insurance and small business relief, a top priority of President Trump and his allies in Congress was another massive tax cut for the wealthy,” Whitehouse said in a statement. “Congress should repeal this rotten, un-American giveaway and use the revenue to help workers battling through this crisis.”

Doggett said that “for those earning $1 million annually, a tax break buried in the recent coronavirus relief legislation is so generous that its total cost is more than total new funding for all hospitals in America and more than the total provided to all state and local governments.”

Doggett and Whitehouse had also sent a letter to the Trump administration last week asking for information about the development of the provisions relating to NOLs. They said that they wanted Congress to be able to “assess whether any individuals within the Administration who stand to gain from these provisions were involved in their development.”

Likely Democratic presidential nominee Joe Biden Joe BidenMomentum growing among Republicans for Supreme Court vote before Election Day Trump expects to nominate woman to replace Ginsburg next week Video of Lindsey Graham arguing against nominating a Supreme Court justice in an election year goes viral MORE also said last week that he would repeal the tax benefit for pass-through owners, saying that it “overwhelmingly benefits the richest Americans and is unnecessary for addressing the current COVID-19 economic relief efforts.” Biden said he would undo the provision in order to finance student debt relief.

Progressive organizations have also been criticizing the NOL provisions. Like Doggett and Whitehouse, they’ve criticized the provision undoing limits for pass-through owners because it benefits high earners. Additionally, progressive groups have argued that it might make sense to allow businesses to carry back losses generated in 2020 in order to provide businesses with more liquidity, but that it doesn’t make sense to allow carrybacks for losses generated in 2019 and 2018, before the coronavirus pandemic ravaged the U.S. economy.

Frank Clemente, executive director of the progressive group Americans for Tax Fairness, said that the generous carrybacks reward businesses who performed poorly “in the good years.”

But Republicans and analysts at right-leaning organizations have defended the NOL provisions, saying they can help businesses have more cash flow that they can use to retain their employees during the pandemic.

“The CARES Act helps businesses keep the lights on and employees on payroll as much as possible to get through this crisis,” a spokesman for Senate Finance Committee Chairman Chuck Grassley Charles (Chuck) Ernest GrassleySenate Republicans face tough decision on replacing Ginsburg What Senate Republicans have said about election-year Supreme Court vacancies Biden says Ginsburg successor should be picked by candidate who wins on Nov. 3 MORE (R-Iowa) said. “Every senator criticizing this provision voted for this bipartisan bill, so their complaints about a law they helped write simply stink of partisan politics.”

Nicole Kaeding, a vice president at the right-lea National Taxpayers Union Foundation, said it makes sense for Congress to allow losses from 2019 and 2018 to be carried back, so that businesses can amend their tax returns and get refunds now that can provide them with additional capital. Businesses would not benefit from carrybacks of losses generated in 2020 until they file their 2020 tax returns next year, she said.

“In response to the coronavirus, expanding NOLs and allowing carrybacks provides businesses with needed liquidity,” Kaeding said.

Kaeding also said the JCT analysis was bound to show that the pass-through provision benefited the wealthy because the provision did away with a cap on losses that only applied to high earners and lower-income people already faced no cap.

Kyle Pomerleau, a resident fellow at the right-leaning American Enterprise Institute, said that allowing losses to offset non-business income is similar to allowing losses to offset a previous year’s income in terms of trying to help businesses recover their losses faster.

He said businesses should be able to recover their losses as quickly as possible, or the tax code becomes biased against risky investments.