They first enacted this in 1919. And then repealed it in 1933. Then when they restored in 1939, they clarified:
> The bill, together with the committee amendments, permits taxpayers to carry over net operating business losses for a period of 2 years. Prior to the Revenue Act of 1932, such 2-year carry-over was allowed. No net loss has ever been allowed for a greater period than 2 years. In the Revenue Act of 1932, the 2-year net loss carry-over was reduced to 1 year and in the National Industrial Recovery Act the net loss carry-over was entirely eliminated. As a result of the elimination of this carry-over, a business with alternating profit and loss is required to pay higher taxes over a period of years than a business with stable profits, although the average income of the two firms is equal. New enterprises and the capital-goods indus- tries are especially subject to wide fluctuations in earnings. It is, therefore, believed that the allowance of a net operating business loss carry-over will greatly aid business and stimulate new enter- prises." (Emphasis supplied.) H. R. Rep. No. 855, 76th Cong., 1st Sess.
From the footnote in page 6 of:
https://tile.loc.gov/storage-services/service/ll/usrep/usrep...
There. I’ve now done more work to validate my claim than the New York Times expert ever did.
I don’t know what they were saying in 1919 - but when a provision and its legitimate justification has existed for 80+ years, I think the NYT expert is being a bit ridiculous to suggest that a principle is being abused.