Senate Tax-Extenders Bill Triggers Flood of Amendments

The Senate Finance Committee is marking up a measure that would renew 45 of 55 expired provisions in the tax code.

WASHINGTON, DC - JANUARY 06: U.S. Sen. Ron Wyden (D-OR) speaks to members of the press as he is on his way for a vote January 6, 2014 on Capitol Hill in Washington, DC. Janet Yellen was confirmed by the Senate with a vote of 56 - 26 to become the first woman to head the Federal Reserve Board.
National Journal
Billy House
Add to Briefcase
Billy House
April 2, 2014, 5:34 p.m.

Sen­ate tax writers face a polit­ic­al-mes­saging and amend­ment blitz from col­leagues and spe­cial in­terests as they head in­to a Thursday meet­ing to con­sider re­new­als for dozens of tax breaks, cred­its, and write-offs that lapsed on Dec. 31.

New Fin­ance Com­mit­tee Chair­man Ron Wyden this week pro­posed to ex­tend for an­oth­er two years 45 of the 55 ex­pired pro­vi­sions in the tax code for busi­nesses and in­di­vidu­als, and his pan­el plans to hold a markup on the meas­ure Thursday morn­ing.

But on Wed­nes­day af­ter­noon, the com­mit­tee an­nounced that it had re­ceived 92 re­quests for amend­ments from mem­bers seek­ing to re­vise the bill.

Among the pro­vi­sions not mak­ing the cut in Wyden’s two-year ex­tender lan­guage — worked out with Fin­ance rank­ing mem­ber Or­rin Hatch — are write-offs for NAS­CAR and oth­er race-car tracks, a tax cred­it for wind en­ergy pro­duc­tion, and spe­cial “ex­pens­ing rules” for the TV and film in­dus­tries. Also chopped was a rule that cor­por­a­tions use to sidestep in­come tax on trans­fers of cap­it­al among off­shore af­fil­i­ates.

In ad­di­tion to leav­ing out some favored tax in­cent­ives, some breaks that Wyden and Hatch pro­pose for re­new­al would be mod­i­fied. For ex­ample, an in­di­vidu­al in­come-tax cred­it for “high­way-cap­able plug-in mo­tor­cycles” would be ex­ten­ded for two years. But that pro­vi­sion is writ­ten to no longer in­clude three-wheel vehicles such as golf carts.

Over­all, the pack­age as pro­posed would ex­tend more pro­vi­sions than it would leave be­hind. Without any changes, it would cost an es­tim­ated $67.3 bil­lion over 10 years.

Pro­vi­sions to be ex­ten­ded for two years in­clude fed­er­al rum re­bates to Pu­erto Rico and the Vir­gin Is­lands; a gen­er­al sales-tax de­duc­tion that mainly be­ne­fits those in states without an in­come tax like Flor­ida and Texas; and rules al­low­ing own­ers of race­horses to de­pre­ci­ate those in­vest­ments over a three-year cost-re­cov­ery peri­od.

Also in­cluded are ex­ten­sions of de­duc­tions re­lated to cor­por­ate re­search and de­vel­op­ment, giv­ing to pub­lic char­it­ies, ex­penses by teach­ers for books and oth­er nonathlet­ic sup­plies, spe­cial tax treat­ment for mil­it­ary ba­sic hous­ing al­low­ance, and cred­it for cer­tain rail­road ex­pendit­ures made to main­tain tracks.

These “tem­por­ary” pro­vi­sions have over the years been al­most routinely re­newed, of­ten on a ret­ro­act­ive basis. But they also are seen by some as a fail­ing of Con­gress to ad­dress tough choices as part of a per­man­ent tax-code re­form.

Re­new­al of most of these items is likely to oc­cur again this year — though Re­pub­lic­ans in the House led by re­tir­ing Ways and Means Com­mit­tee Chair­man Dave Camp have prom­ised a stricter “policy-by-policy” re­view.

In­dic­a­tions are that ac­tion on a bill in the House could be put off un­til after the Novem­ber elec­tions, per­haps in a lame-duck ses­sion. It could be one of Camp’s last acts as a chair­man who tried, but failed, to get ac­tion on a tax-code over­haul.

Mean­while, Wyden is de­clar­ing on his side of the Cap­it­ol that this will be the last such ex­tender pack­age to be en­acted un­der his watch as chair­man; the Ore­gon Demo­crat says it’s time Con­gress fo­cused less on keep­ing the status quo and more on ac­tu­ally re­vamp­ing the na­tion’s tax code.

Hatch also be­lieves the pro­cess needs to be changed. “This pared-back bill demon­strates to the Amer­ic­an people that Con­gress can and will make the tough de­cisions needed to help clean up our broken tax code,” the Utah Re­pub­lic­an said in a state­ment this week.

But such de­clar­a­tions could be sig­ni­fic­antly chal­lenged Thursday, based on the list of amend­ments an­nounced Wed­nes­day by the com­mit­tee.

Some of those amend­ments seek to re­new pre­vi­ous tax breaks that did not make it onto the Wyden-Hatch list, such as an amend­ment seek­ing to ex­tend the so-called NAS­CAR tax cred­it for sev­en years. It is co­sponsored by Sens. Debbie Stabenow, D-Mich., Richard Burr, R-N.C., Bill Nel­son, D-Fla., and Mark Warner, D-Va.

Oth­er amend­ments seek to elim­in­ate pro­vi­sions that Wyden and Hatch pro­pose for re­new­al, or oth­ers that are on the books — in­clud­ing one dubbed the “Elim­in­ate Crony Cap­it­al­ist En­ergy Tax Cred­its” offered by Sen. Pat Toomey, R-Pa.

Some amend­ments seek to make pre­vi­ously “tem­por­ary” tax breaks per­man­ent. Still oth­ers pro­pose to at­tach un­re­lated items to the ex­tenders bill, such as one offered by Sen. Maria Can­t­well, D-Wash., that would provide dis­aster aid to people in her state im­pacted by the re­cent mud slide. Toomey also of­fers an amend­ment to “pro­tect bald eagles from wind tur­bines.”

The amend­ment activ­ity is evid­ence of the in­tense lob­by­ing and some­times acute spe­cial-in­terest sens­it­iv­it­ies fa­cing law­makers re­gard­ing these breaks.

One left-lean­ing group, Amer­ic­ans for Tax Fair­ness, is­sued a re­port earli­er this week say­ing its re­search shows 1,269 lob­by­ists rep­res­ent­ing 373 com­pan­ies and trade as­so­ci­ations have re­por­ted lob­by­ing on the broad top­ic of “tax ex­tenders.”

The group’s ex­ec­ut­ive dir­ect­or, Frank Clem­ente, praised Wyden for such moves as not in­clud­ing the so-called CFC look-through rule,” which has al­lowed cor­por­a­tions to de­fer oth­er­wise tax­able in­come through use of for­eign en­tit­ies. But he also pre­dicted in a state­ment Wed­nes­day that the Wyden-Hatch pack­age will grow lar­ger and more costly dur­ing Thursday’s markup.

Clem­ente said it is “troub­ling how quickly sen­at­ors ap­pear to be able to work out a deal on tax ex­tenders that are un­paid for and largely be­ne­fit cor­por­a­tions while spend­ing months craft­ing an emer­gency un­em­ploy­ment-be­ne­fits pack­age that is paid for by cut­ting oth­er spend­ing.”

What We're Following See More »
PENCE BREAKS THE TIE
Senate Will Debate House Bill
4 hours ago
THE LATEST

By the narrowest of margins, the Senate voted 51-50 this afternoon to begin debate on the House's legislation to repeal and replace Obamacare. Sens. Lisa Murkowski and Susan Collins defected from the GOP, but Vice President Pence broke a tie. Sen. John McCain returned from brain surgery to cast his vote.

Source:
WON’T SAY IF HE’LL FIRE HIM
Trump “Disappointed” in Sessions
5 hours ago
WHY WE CARE

“'It’s not like a great loyal thing about the endorsement,'” Mr. Trump said in an interview with The Wall Street Journal. 'I’m very disappointed in Jeff Sessions.'”

Source:
MURKOWSKI, COLLINS VOTE NAY
Republicans Reach 50 Votes to Proceed on Health Bill
5 hours ago
THE LATEST
INTERVIEWED KUSHNER FOR OVER THREE HOURS
House Russia Probe: Kushner “Satisfied” Questions
5 hours ago
THE LATEST

"Republicans who interviewed Jared Kushner for more than three hours in the House’s Russia probe on Tuesday said the president’s son-in-law and adviser came across as candid and cooperative. 'His answers were forthcoming and complete. He satisfied all my questions,' said Rep. Mike Conaway (R-Texas), who’s leading the House Intelligence Committee’s investigation into Russian meddling in the 2016 election, including possible collusion between Moscow and the Trump campaign."

Source:
VICTORY FOR GUN RIGHTS ADVOCATES
Appeals Court Block D.C. Gun Control Law
7 hours ago
THE DETAILS

"A U.S. appeals court on Tuesday blocked a gun regulation in Washington, D.C., that limited the right to carry a handgun in public to those with a special need for self-defense, handing a victory to gun rights advocates. The U.S. Court of Appeals for the District of Columbia Circuit's 2-1 ruling struck down the local government's third major attempt in 40 years to limit handgun rights, citing what it said was scant but clear guidance from the U.S. Supreme Court on the right to bear arms."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login