Note: like Freddy Kruger, the tax loss carryover provision that we helped defeat last spring has come back to life. There is still a chance to stop this as the actual stimulus bill has not even been drafted yet.

I know were all tired of this, but please take the time to call/write.
Here is my letter:

______________________________

Dear Senator Isakson,

I am writing you today to ask you to oppose any tax loss carryover provisions in the stimulus package being drafted in the new Congress.

Under current IRS rules, businesses may carry a net operating loss back to the two years immediately preceding the current one, for the purpose of obtaining a tax refund on taxes previously paid. My understanding of the new proposal (which may at this point be a trial balloon floated by lobbyists) is that it would extend the period to five years.

While I am certain that a few failing corporations in some industries such as retail, home building and banking would benefit from this change in the tax law, it would be at the expense of their competitors who have exercised prudence and better judgment. Once again we see Washington getting involved in the moral hazard of propping up failing institutions. Apparently if billions of dollars won’t do the trick, trillions will.

Consider also the fact that our federal budget deficit is rapidly growing out of control. Taxpayer funds could be instead spent on encouraging investment into productive sectors of the economy, or better yet not spent, period.

At this point there is a mad rush to commit yet another huge amount of money that our government does not have to “fix” the economy. As a fiscal conservative you should know that the economy cannot be centrally planned by DC bureaucrats, and that borrowing our way out of a recession won’t work.

What will work is to allow those corporations that used too much leverage and debt in the last business cycle to simply sink or swim on their own. Other opportunities will arise in the future, and private capital can be put to more productive uses.


Please insist on some common sense and fiscal discipline.