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Law360 (April 9, 2020, 5:54 PM EDT ) Congress should reverse expanded business loss tax benefits passed in the latest coronavirus relief legislation to pay for immediately canceling at least $10,000 of every student loan borrower's debt in its next bill, former Vice President Joe Biden said Thursday.
Biden, the presumptive 2020 Democratic presidential candidate, said in an op-ed on Medium that his student debt forgiveness proposal would be paid for by rolling back the "'excess business losses' tax cut" passed with the Coronavirus Aid, Relief and Economic Security Act.
It was the third coronavirus response bill that President Donald Trump has signed."That tax cut overwhelmingly benefits the richest Americans and is unnecessary for addressing the current COVID-19 economic relief efforts," Biden said.
The law allows businesses to carry back losses from 2018, 2019 and 2020 for up to five years. In addition, net operating losses temporarily will not be subject to a taxable income limit, meaning they can fully offset income.
Biden said that a student loan debt forgiveness program such as the one proposed by former presidential candidate Sen. Elizabeth Warren, D-Mass., would help working families during the downturn caused by the coronavirus pandemic.
"I believe that as we are being plunged into what is likely to be one of the most volatile and difficult economic times in this country's recent history, we can take these critical steps to help make it easier for working people to make ends meet," Biden said.
Student loan debt-holders who attended public colleges and earn up to $125,000 annually would be eligible to have their entire debt forgiven "with appropriate phaseouts to avoid a cliff," Biden said.
Low-income individuals, earning less than $25,000 annually, would face no monthly payments or accrued interest, according to his proposal.
Biden said that those who earn more than $25,000 annually would pay no more than 5% of their discretionary income toward loan payments. After 20 years, the remainder of the federal debt would be forgiven tax-free, according to the proposal.
Biden also proposed extending unemployment benefits further, providing more funding to local and state governments to give health care workers the resources they need and opening the Affordable Care Act health insurance exchanges to those who may have lost employer-sponsored coverage.
Biden said he would announce further details on the student debt forgiveness proposal soon, but didn't provide a time frame.
His campaign didn't immediately respond to a request for comment.
Warren's proposed legislation, the Student Loan Debt Relief Act, was introduced in July and would allow households that earn less than $100,000 in adjusted gross income to receive a maximum $50,000 in a one-time debt cancellation. Those 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 annual adjusted gross income, or joint filers earning up to $500,000, would be eligible for partial debt cancellation. The cancellation amount would reduce by $1 for every $3 in income earned above $100,000, according to a bill summary.
--Additional reporting by Joshua Rosenberg and Stephen Cooper. Editing by Neil Cohen.
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