Rather than deal with the politically painful and time consuming process of deciding which of nearly 60 expiring tax breaks are worth extending in the next few weeks, Congress is set to simply pass all of them — again.
The breaks include charitable deductions and mortgage debt forgiveness for individuals, a credit that rewards businesses for hiring diverse workers, a wind energy credit, and breaks for small businesses that incentivize investment.
There is consensus that some of them, such as a break for racehorse owners and a $15 million deduction for film productions 387 million in 2015 — estimated to cost taxpayers $460 million in 2015 — should go. But Congress has routinely avoided sorting through the mess and "temporarily" re-extended all of the breaks.
House Ways and Means Republicans approved legislation in April to make six of the breaks that have broad bipartisan support permanent, and would like to extend others, but Democrats are opposed and say the permanent breaks are too expensive and "fiscally irresponsible."
"If we extend policy for 30 years, we ought to make it permanent," said House Ways and Means Chair Dave Camp, according to The Hill, after approving the permanent breaks. "One of the problems facing a lot of job creators is the uncertainty of our tax laws."
The Senate Finance Committee approved a bill that would extend all of the breaks for another two years, at an estimated cost of about $84 billion over the next ten years. By contrast, House Republicans plan would cost upwards of $300 billion over the next ten years.
The Senate's bill is deceptively cheaper, because the Congressional Budget Office assumes the breaks are temporary in estimating the cost, even though most of them have been renewed repeatedly and will likely be renewed again.
"We need to get out of this trap of temporarily extending policy and letting it expire," Camp added. "That is the worst of all worlds, and I'm going to do everything I can to try to move this issue forward."
Congress has had nearly two years to consider the merits of the individual tax breaks and figure out what to do with them, but Democrat Sen. Ron Wyden, Senate Finance Committee chair, says extending the breaks is necessary at this point, and may really be temporary this time.
"The reason you do comprehensive, bipartisan tax reform is that's the place where you put the spotlight on each and every one of these provisions," he told The New York Times. "You can't do that in the space of 11 days."
Since comprehensive tax reform is unlikely in the next two years, the tax breaks will likely be extended this year, and again by a Republican Congress in 2016.Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.