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U.S. to Provide Tax Holiday and Loans to Combat Coronavirus Economic Impact
President Trump announced on Wednesday night that the United States will be implementing a three-month tax holiday for individuals, small, and mid-sized businesses in an effort to combat the economic impact of the novel coronavirus. Additionally, affected companies will receive $50 billion in low-interest loans to help keep markets liquid and encourage spending.
However, these measures were somewhat overshadowed by Trump’s announcement of a 30-day suspension of travel from Europe, causing confusion over whether cargo would also be banned. Despite this, Trump emphasized that the Small Business Administration (SBA) would be providing capital and liquidity to firms affected by the virus, offering low-interest loans to companies in affected areas.
Furthermore, Trump stated that he would be asking Congress to increase funding for the SBA lending program to $50 billion, more than double the amount of loans made in fiscal year 2019. In addition, individuals and businesses will have the option to defer paying their federal income taxes for three months, with no penalties.
Treasury Secretary Steven Mnuchin testified to Congress that deferring taxes could inject an additional $200 billion into the U.S. economy, although details on how this figure was calculated were not provided. These measures are part of the government’s efforts to support businesses and individuals during this challenging time.
