Senate panel schedules action on tax breaks bill

The Senate Finance Committee will consider a package extending a grab bag of expired tax provisions on Thursday, the panel said Tuesday.

{mosads}Finance Chairman Ron Wyden (D-Ore.) has made dealing with the provisions, commonly known as tax extenders, a top priority since taking the gavel in February.

The measure Wyden hashed out with Sen. Orrin Hatch (Utah), the top Republican on the Finance Committee, would extend 45 provisions through 2015 and leave others on the chopping room floor. More than 50 incentives expired at the end of 2013.

Wyden said last week that he hoped to use the latest round of extenders as a springboard to tax reform, and that this week would mark the final Finance mark-up of an extenders package.

“This bipartisan extenders package is the product of a Finance Committee that came together to provide needed certainty to the economy, protect jobs and maintain important priorities for working families,” Wyden said in a statement Tuesday. “With that said, I am determined this will be the last extenders bill on my watch. It’s high time we focus on creating a new, 21st-century tax code, because the status quo is unacceptable.”

Hatch had said last week he was concerned the extenders package would revive too many expired provisions. But in his Tuesday statement, Hatch cast “this pared back bill” as a victory that would not bring some incentives back.

“For far too long Washington has acted to extend long-standing tax policy, rarely shining a spotlight on the individual provisions or their impact on the families and businesses that benefit from them. Such dysfunction must come to an end,” the Utah Republican said.

In all, extending the 45 provisions, the vast majority of which expired at the end of 2013, would cost in the neighborhood of $67 billion over a decade. A summary of the measure provided by the Finance Committee contains no provisions to offset those costs. Liberal groups have chided lawmakers for not paying for an extenders package, all while Republicans seek to ensure that an extension of lapsed unemployment benefits is offset.

The extenders package also contains several provisions with powerful backers on Capitol Hill, underscoring the challenge of paring back the expired incentives and for overhauling the tax code in general.

The two most expensive incentives in the package are the popular credit for research and development and a preference that allows companies to defer paying taxes on offshore financial services income, a provision prized by General Electric and other corporate powers. Those two provisions and a deduction for state and local sales taxes account for almost half the total cost of the package.

Wyden and Hatch’s original package does not include the production tax credit for wind energy, another expensive provision. But that incentive, which has prominent supporters on both sides of the aisle, could be added back in during Thursday’s mark-up.

Sen. Chuck Grassley (R-Iowa), a former Finance chairman, said Tuesday he would seek to insert the production tax credit into the extenders measure.

The package does include a tax break for workers that use mass transit, supported by Sen. Chuck Schumer (D-N.Y.), and an incentive for the horse racing industry backed by Senate Minority Leader Mitch McConnell (R-Ky.).

Some provisions often derided as corporate pork, like a preference for the Puerto Rican rum industry, survived the cut, while others — a tax break for NASCAR track — aren’t in the initial measure.

— This story was updated at 12:58 p.m.