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GOP Blocks US Senate Tax Extenders Bill

by Mike Godfrey, Tax-News.com, Washington

20 May 2014


Following a refusal on May 15 by the Democrat leadership to consider amendments proposed by Republicans, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, which would extend virtually all of the tax relief provisions known as "tax extenders" until the end of 2015, failed to advance in the United States Senate.

Despite their renewal being a bipartisan issue in Congress, with the Republican-led House of Representatives also looking at making permanent a selected number of the measures, the EXPIRE Act failed to clear a procedural hurdle in the Senate with a vote of only 53-40 (60 votes being needed for passage).

Republicans objected to not being allowed to offer amendments, particularly one proposing repeal of the Affordable Care Act's medical device tax that, it was said, would enjoy broad bipartisan support. While it is still possible that the EXPIRE Act can be reintroduced into the Senate at a later date, agreement will need to be reached in the future by the two sides on how to proceed.

Ron Wyden (D – Oregon), who, as Chairman, had succeeded in passing it through the Senate Finance Committee on a bipartisan basis, had tried to sell the EXPIRE Act as providing "some certainty to businesses and families for the next two years," while "building a bridge [to] true tax reform." After the vote, he contended that he was still looking to find a path forward, although he would still only "be open to narrowly related amendments similar to those added in Committee that strengthen the bill."

However, in his speech on the Senate floor, Finance Committee Ranking Member Orrin Hatch (R – Utah) had called on the Senate Democrat leadership to allow other tax-related amendments to be considered for the bill. "While I'm satisfied with the way the Finance Committee handled the tax extenders package, the vast majority of Senators do not serve on the Finance Committee. That being the case, most Senators have not had a chance to fully debate these tax provisions or offer amendments of their own," he said.

The tax extenders package includes more than 50 tax provisions that expired at the end of last year. For individuals, the expired tax provisions include mortgage tax relief, the deduction for state and local sales taxes, education tax deductions, and tax-free contributions from individual retirement accounts for charitable purposes.

For businesses, the tax extenders include increased expensing under Section 179 (full deduction on cost of qualifying equipment) for which the limit fell from USD500,000 to USD25,000; the 50 percent bonus depreciation; the work opportunity tax credit; the credit for research and development expenses; and tax breaks promoting renewable energy, such as the production tax credit for wind energy projects.

TAGS: individuals | Finance | tax | business | sales tax | tax incentives | energy | law | retirement | corporation tax | tax credits | education | legislation | United States | tax breaks | tax reform | individual income tax | research and development

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