The Senate passed, 76-16, and sent to President Obama a retroactive one-year revival of four dozen tax incentives that expired at the start of this year. The extension will die at the end of this month, so lawmakers will face the problem again in January of renewing the tax breaks.
“The only new effects of this legislation apply to the next two weeks,” said Finance Committee chairman Ron Wyden, who voted against the $41 billion bill and called for full-scale tax reform. “I want tax reform to provide a middle class tax cut. I want it to drive innovation and launch a new wave of job creation. I want it to put in place a simpler, more competitive corporate tax system that draws investment and jobs to the United States. And I want it to end the cycle of stop-and-go policy that leaves taxpayers in the dark time and time again,” Wyden said in a statement.
Utah Sen Orrin Hatch, the incoming Finance chairman, said the one-year extension was “quite literally the best we could do,” according to Forbes. The Finance Committee proposed a two-year extension but the House, after bogging down over tax reform, approved the one-year plan that the Senate accepted.
Included in the package is restoration of the $500,000 deduction for purchases of new business equipment, so-called bonus depreciation, the $1-a-gallon biodiesel tax credit and the production tax credits for wind power. All four items are important to rural areas. Agri-Pulse said “in a victory for agricultural shippers,” the Senate included a 9-cent increase in the barge fuel tax, to help pay for work on inland waterways.
“For next year, it’s difficult to answer,” said Iowa Sen Chuck Grassley, a Finance Committee member, when reporters asked what to expect in 2015 for the provisions. They will be on the table for discussion as part of tax reform, he said. If tax reform falters, “all 53 will be up for grabs,” he said.