Max Baucus: “a fundamental feature of any income tax system is the ability to use losses to reduce taxable gains. If a company has…”

“a fundamental feature of any income tax system is the ability to use losses to reduce taxable gains. If a company has gross income of $100,000 and losses of $50,000, we don't force the company to pay tax on $100,000--they only pay tax on net income. But just as a company can have gross income and losses within the same year, a company can also have income in one year and losses in the next. Letting companies ``carry-back'' their losses to prior years smooths things out and helps companies deal with the hardships of the business cycle. And it is important to be able to carry losses back. Carrying losses forward doesn't give taxpayers a boost when they need it. Carrying losses forward only gives them a boost after things have already turned around. Many businesses have been in hard times for the last 3 or 4 years. Giving them a 1- or a 2-year NOL carryback doesn't help them--because they don't have any profits in the last few years. For many of these companies, the last year they were profitable was 1999 or even earlier. These companies will be able to use a 5-year NOL carryback to help them turn things around. I urge you to support this amendment, to help get our economy going again.”