House panel approves bills on tax extenders, expanding tax credits

The House Ways and Means Committee on Thursday advanced Democratic legislation to extend expired and expiring tax breaks and to expand tax credits that benefit workers and families.

The committee passed by a party-line vote of 25-17 a bill to extend through 2020 a host of tax breaks that expired in 2017 and 2018 or will expire at the end of this year.

Congress routinely passes legislation renewing temporary tax breaks, known as “tax extenders.” 

{mosads}Lawmakers in both the House and Senate are interested in passing an extenders package this year.

The legislation the Ways and Means Committee approved is designed to serve as a starting point in discussions on the topic.

Provisions that would be extended include a number of tax breaks benefiting the renewable energy industry and provisions of the Republican tax law that provide employers with a credit for paid family leave and that reduce alcohol excise taxes.

The bill would also provide tax relief to survivors of natural disasters occurring from Jan. 1, 2018 through 30 days after the bill’s enactment.

The cost of the portion of the bill that renews expired and expiring tax breaks was offset by a provision that would have the GOP tax law’s estate-tax changes expire after 2022 instead of 2025.

No revenue-raiser was designated for the portion of the bill focusing on disaster tax relief. The Joint Committee on Taxation estimated that the bill would lower federal revenue by about $5 billion over 10 years.

Rep. Mike Thompson (D-Calif.), who introduced the bill, said that it “helps taxpayers in too many ways to list this afternoon.”

But committee Republicans criticized the bill, saying it doesn’t provide taxpayers with-long term certainty.

“This bill merely continues the problematic status quo of continued temporary extensions of a wide spectrum of tax extenders,“ said Rep. Adrian Smith (R-Neb.).

Republicans offered a number of amendments to call attention to their priorities. For example, they offered amendments to make permanent temporary provisions in the GOP tax law, as well as to repeal taxes created by ObamaCare.

The GOP amendments failed, with Democrats often criticizing them for not including provisions to offset their costs.

The Ways and Means Committee also approved by a vote of 22-19 a bill to expand for 2019 and 2020 three tax credits that benefit workers and families: the earned income tax credit, the child tax credit and the child and dependent care credit.

The measure also would repeal a provision in the GOP tax law that imposes a 21-percent tax on nonprofits’ expenses for transportation benefits for their employees.

Ways and Means Committee Chairman Richard Neal (D-Mass.) said the bill “provides an important economic boost for middle-class families who continue to struggle in this economy.”

Republicans support the portion of the bill to repeal the tax on nonprofits but they voted against the bill because they opposed other portions.

Rep. Kevin Brady (R-Texas), the top Republican on the committee, said the earned income tax credit has been “regrettably abused.” Democrats, however, said there are already stringent penalties for making errors with the EITC.

The Joint Committee on Taxation estimated that the bill as originally introduced would lower federal revenue by about $102 billion over 10 years.

Neal said that the bill would be paid for when it comes to the House floor. Nonetheless, three Democrats on the panel — Reps. Lloyd Doggett (Texas), Ron Kind (Wis.) and Stephanie Murphy (Fla.) — voted with Republicans against the bill because an offset was not included in the version the committee took up.

The Ways and Means Committee also advanced a third bill, which would increase entitlement funding for child care. As was the case with the tax-credit bill, Doggett, Kind and Murphy joined with Republicans in voting against the bill because the measure the committee considered wasn’t offset.

Additionally, the Ways and Means Committee advanced by voice vote legislation that would allow same-sex married couples to amend their filing status on tax returns outside of the statute of limitations, and that would remove gender-specific references to marriage in the tax code.