The U.S. Senate Finance Committee is trying to reach a bipartisan agreement to continue dozens of lapsed and expiring tax breaks, including benefits for corporate research and wind energy.
Committee members met in private late yesterday and are scheduled to do so again today. Many of the tax breaks, including the research credit, expired at the end of 2011.
“We’re ready when we’re ready, and we’re getting closer,” Senator Max Baucus, a Montana Democrat and chairman of the committee, said today.
Senators disagree on the scope of the package of tax breaks, and their ability to reach a deal is limited by that dispute. Also, at the end of this week, Congress plans to recess until Sept. 10.
Republicans want to limit the bill to provisions they say have been routinely extended in the past, including the research credit, an optional deduction for state sales taxes and a break that lets financial services companies defer taxes on income they earn outside the U.S.
“It’s all conditioned on how tightly focused the effort is,” said Senator Richard Burr, a North Carolina Republican.
Democrats have been trying to extend the college tuition tax credit that expires at the end of this year and revive renewable energy tax breaks from the 2009 economic stimulus law.
Alternative Minimum Tax
Senator Charles Schumer, a New York Democrat, said his party wants to ensure that more taxpayers aren’t subject to paying the alternative minimum tax for the 2012 tax year.
“I think we’re close, but we’re not there yet,” said Senator Ben Cardin, a Maryland Democrat, who said there is “no such thing” as a standard package of so-called extenders. “Every extender package has been different. There isn’t one extender package that didn’t have some extra issues in it.”
Senator Orrin Hatch of Utah, the top Republican on the committee, said there are several holdups.
If lawmakers can’t agree on a narrow bill extending these tax breaks, Hatch said, “It will make it even more difficult to do tax reform, which everybody admits has to be done.”
The Republican-led House has been reviewing the provisions to see whether all of them are justified. The House won’t consider a bill on the miscellaneous provisions until after the Nov. 6 election, said Representative Patrick Tiberi, an Ohio Republican and senior member of the Ways and Means Committee.
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