Nov. 4 (Bloomberg) -- Republicans in the U.S. House of Representatives are starting to discuss extending dozens of tax breaks that expire Dec. 31, including benefits for corporate research and U.S.-based banks’ overseas operations.
“I know they’re there,” Ways and Means Chairman Dave Camp said in a brief interview today. “We usually deal with them by the end of the year.”
Lawmakers said their efforts to advance a bill on the so- called tax extenders have been complicated and delayed by deliberations of the deficit-reduction supercommittee, which may address related issues and is occupying Camp’s time. Camp sits on the 12-member panel.
A one-year extension of the expiring provisions that have been routinely moved forward would cost the Treasury more than $30 billion in forgone revenue.
In interviews yesterday and today, Ways and Means Committee members said they had recently begun discussing the provisions. They said they hadn’t made decisions about which provisions they want to continue and whether would be paired with offsets to blunt the effect on the budget deficit.
“We’ll deal with that later,” Camp, a Michigan Republican, said when asked about offsets. Decisions about whether all expiring tax provisions would be continued, he said, are “to be determined.”
Lawmakers also will separately consider the Dec. 31 expiration of the 2 percentage-point cut in the payroll tax. President Barack Obama has called for Congress to extend and expand that break.
Republicans generally favor extending expiring tax breaks without offsetting the cost in forgone revenue. Democrats, including those who control the Senate, usually want revenue increases as offsets, such as higher taxes for oil and gas companies and the carried interest of private-equity managers.
The list of expiring provisions is varied, including a research credit that benefits companies such as Eaton Corp. and Raytheon Co. and the active-financing exception that benefits the global operations of Morgan Stanley, General Electric Co. and Citigroup Inc.
Other provisions slated to expire are the ethanol blenders’ tax credit, a tax break for film and television production and accelerated depreciation for some investments on American Indian reservations.
Representative Patrick Tiberi said lawmakers are trying to consider whether some provisions cause more difficulty for taxpayers if they are extended retroactively.
“Some extenders are more important than other extenders,” said Tiberi, an Ohio Republican who said Ways and Means members had begun informal discussions about the expiring tax breaks.
Must ‘Be Done’
Representative Charles Boustany, a Louisiana Republican, said he expected the Ways and Means Committee to begin more intensive work on the extenders when the House returns to Washington the week of Nov. 14.
“It’s one of those things that has to be done,” he said. “And hopefully we’ll get it done on time.”
Some expiring tax breaks affect individual taxpayers, including the ability to deduct state and local taxes and teachers’ out-of-pocket expenses.
Congress last extended the expiring tax breaks in December 2010 as part of a law that continued income tax cuts through 2012. Most of the miscellaneous breaks had lapsed at the end of 2009, so the two-year extension pushed the new expiration dates to the end of 2011.
--Editors: Jodi Schneider, Robin Meszoly
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