Senate Finance clears tax extenders measure

The Senate Finance Committee approved an extension of dozens of expired tax breaks on Thursday, backing billions of dollars worth of incentives prized by a range of corporate interests.

{mosads}Finance Chairman Ron Wyden (D-Ore.) said the so-called tax extenders package, with a price tag north of $85 billion, would be the last on his watch as he seeks a broader overhaul of the tax code. The package passed the committee by voice vote, with just a smattering of ‘no’ votes heard from the GOP side.

The panel’s top Republican, Sen. Orrin Hatch (Utah), and other tax writers from both parties agreed with Wyden, stressing that the short-term extensions that have become commonplace in recent years caused problems for businesses and individuals alike.

“I understand why Americans who flip on C-Span and watch this proceeding are skeptical about the prospect of improvement,” said Wyden, who has repeatedly said that he hopes to use the extenders legislation as a jumping-off point for broader tax reform.

“There have been loads of promises in the past of tax reform,” the Oregon Democrat added. “When I joined the Finance Committee nearly a decade ago, I couldn’t possibly have imagined chairing Congress’ fifteenth time renewing the stop-and-go tax cuts called ‘extenders.’”

With Thursday’s vote, the committee decided to extend the vast majority of the more than 50 temporary tax breaks that expired at the end of 2013, with just a handful not getting revived. The tax breaks that did make it into the package would be extended through 2015. 

The credit for research and development was the most expensive of the tax breaks to get extended, while provisions that allow corporations to defer taxes on offshore financial services income and incentives that allow businesses to quickly write off investments were given new life as well.

Just on Thursday, Wyden also added to the original package he crafted Hatch, inserting extensions of a production tax credit for the wind industry and tax breaks for NASCAR track owners and filmmakers.

Other very narrowly tailored incentives – including for Puerto Rican rum producers and the thoroughbred industry – were extended, too.

Wyden didn’t allow votes on the most controversial of the more than 90 amendments offered to the extenders legislation, including proposals to delay new IRS rules for tax-exempt groups and taxes tucked into ObamaCare.

But that didn’t stop Republicans from trying.

For instance, Sen. Pat Toomey (R-Pa.) pushed for a vote to delay the medical device tax, one of the revenue provisions in the healthcare law that has bipartisan opposition – and something that Hatch called an “ungodly, terrible, stupid, dumbass tax” on Thursday. 

Senate tax writers did agree to expand a tax break for commuters to help defray the cost of bike-sharing memberships, a proposal championed by Sen. Chuck Schumer (D-N.Y.). The panel also expanded the research and development credit to help start-up firms.

Wyden declined to speculate about when or if the package of tax breaks might hit the Senate floor, though he did note that Majority Leader Harry Reid (D-Nev.) has strongly supported extenders legislation.

In the House, Ways and Means Chairman Dave Camp (R-Mich.) will soon start his own extenders process, seeking to find ways to either extend provisions permanently or let them stay expired.

Many around Capitol Hill don’t expect an extenders package to make it through Congress before voters head to the polls in November. Two years ago, then-Finance Chairman Max Baucus (D-Mont.) also marked up extenders legislation, which was then tacked on to the fiscal cliff deal signed in early 2013.

At the end of Thursday’s hearing, Wyden brushed aside concerns that the committee’s inability to pare down the extenders package was a bad sign for tax reform, where lawmakers have to be willing to give up tax breaks in order to lower rates.

Many of the tax breaks that got extended had powerful patrons – like Schumer, Sen. Chuck Grassley (R-Iowa), who calls himself the “father” of the wind credit, and Senate Minority Leader Mitch McConnell (R-Ky.), a staunch supporter of the thoroughbred tax break.

“The irony is, sometimes dealing with a bigger package in taxes may not be that much tougher than dealing with a smaller package in taxes,” Wyden told reporters.

This post was last updated at 5:25 p.m.