Dozens of tax breaks that lapsed Dec. 31 would be revived in a plan to be presented soon by the new chairman of the U.S. Senate Finance Committee.
The committee probably will hold a vote during the week of March 31, said a Democratic aide to the panel.
The package includes multi-billion-dollar provisions such as the research and development credit and a break that lets companies including Citigroup Inc (C:US). and General Electric Co (BA:US). defer U.S. taxes on some of their foreign income. Also on the list are benefits for horse breeders and mass-transit commuters.
Other expired breaks include the production tax credit for wind energy and a credit for manufacturers of energy-efficient appliances such as Whirlpool Corp.
The tax-break vote will be the first test for Senator Ron Wyden, the Oregon Democrat who became the Finance Committee’s chairman last month.
The panel hasn’t decided whether to extend the breaks through the end of 2014 or 2015, said the aide, who spoke on condition of anonymity when discussing the committee’s yet-to-be-announced plans. Wyden’s proposal probably will exclude or refine some of the 55 expired breaks, the aide said, with a goal to produce a bipartisan bill.
No decisions have been made on the content of the measure or the timing for a committee session and vote, said Julia Lawless, a spokeswoman for Senator Orrin Hatch of Utah, the panel’s top Republican.
“When it comes to tax extenders, Senator Hatch believes there’s a lot of fat that needs to be cut and that Congress should not continue to deal with them in a business-as-usual manner,” Lawless said in an e-mailed statement. “A committee markup would provide an opportunity to expose these provisions to scrutiny and sunlight.”
Hatch has called for individual scrutiny of the expired measures.
“I’m going to insist that we cut back rather than just keep all of them,” he told reporters in early January. “We should do only the ones that we really should do.”
Wyden has made reviving the lapsed breaks his first goal since taking over for Max Baucus, a Montana Democrat who is now the U.S. ambassador to China.
The path forward after a committee vote or Senate passage isn’t clear.
House Republicans have said they won’t consider a short-term extension of the breaks. In that chamber, Ways and Means Committee Chairman Dave Camp, a Michigan Republican, on Feb. 26 released a draft revamp of the entire U.S. tax code.
“I am not going to sacrifice important matters like research and development and innovation on the altar of perhaps some inaction on comprehensive reform,” Wyden said Feb. 13 on Bloomberg Television’s “Political Capital with Al Hunt.”
A one-year extension would cost the government $46 billion or $47 billion in revenue, the aide said, while continuing the breaks for two years would cost $88 billion.
Congress last extended many of the same benefits in January 2013, when they were attached to a law allowing tax cuts to expire for top earners.
The on-again, off-again cycle of the lapsed breaks can cause earnings fluctuations for publicly traded companies.
When U.S. companies report their first-quarter earnings for 2014, they will have to assume that the breaks expired.
In the first quarter of 2013, companies recorded the benefits associated with five quarters, because the retroactive break enacted in January covered all of 2012.
That means this year’s first-quarter earnings -- especially for technology and pharmaceutical companies that rely on the research credit -- will be hard to compare with the prior year.
Many of the provisions have broad bipartisan support. Others, including the wind credit and accelerated depreciation for motor sports tracks, divide U.S. lawmakers.
Some tax breaks have influential backers either on the committee or in the Senate.
For example, Senate Republican Leader Mitch McConnell has supported a lapsed provision that shortens the depreciation period for race horses, an issue that’s important to the horse industry in his home state of Kentucky.
Senator Charles Schumer, a New York Democrat, has focused on a lapsed provision that allows mass-transit commuters to receive as much as $250 in tax-free benefits a month, up from the current $130.
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