A GOP tax break included in the COVID-19 relief legislation means American taxpayers will partially subsidize settlement payments stemming from opioid litigation, two Democratic Congressmen said Friday.
U.S. Sen. Sheldon Whitehouse (D-RI) and Rep. Lloyd Doggett (D-TX) said in a joint statement that a tax giveaway for “net operating losses” slipped into the Coronavirus Aid, Relief, and Economic Security (CARES) Act will provide opioid distributors like Cardinal Health an opportunity to write off some of its losses from opioid litigation settlements.
These tax breaks for so-called “net operating losses” in the Coronavirus Aid, Relief, and Economic Security (CARES) Act were estimated by the nonpartisan Joint Committee on Taxation (JCT) to cost more than the assistance to hospitals included in that legislation and to overwhelmingly benefit a narrow set of wealthy taxpayers.
“Many of the same Americans who were victimized by opioid hucksters are now being asked, as taxpayers, to finance almost $1 billion of the belated settlement for Cardinal Health through a special interest tax provision buried in pandemic relief legislation,” Doggett and Whitehouse said in the statement. “This is the same provision which we have been opposing since it was discovered last April. Our repeal legislation would deny them at least half of this unjust windfall, which has absolutely nothing to do with the pandemic. We still have an opportunity to stop this travesty. The American Rescue Plan should rescue the needy, not the wrongdoers.”
The statement comes after a Washington Post article said four opioid distributors – Cardinal Health, Johnson & Johnson, McKesson, and AmerisourceBergen – updated their financial statements recently to reflect their portions of the $26 billion opioid settlement as “net operating losses” and claiming they are due a tax refund instead.
Both Whitehouse and Doggett have called for the repeal of the tax giveaway by introducing the CARES Windfall for the Wealthiest Repeal Act, which passed in the House twice last year but was blocked by the then Republican-controlled Senate.