TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, January 1, 2012

53 Tax Breaks Expired Today (Jan. 1)

Today marks the demise of 53 tax breaks commonly referred to as the "extenders" because Congress eventually votes to extend them for another year. They include several popular provisions, such as the AMT patch (which protects 30 million middle-class taxpayers from the AMT, at a cost of $70 billion/year), employee mass transit subsidy (to $230/month from $125/month), research and development tax credit, and bonus depreciation and 100% expensing. Of course, the budget shell game is that the CBO assumes the expiration of these provisions and thus masks the true size of the deficit. Many of the 53 tax breaks are questionable at best (e.g., various alternative energy tax breaks and investment incentives, the special NASCAR depreciation rule), but are typically extended as part of the package (for which members of Congress troll for campaign contributions from affected individuals and businesses). For a complete list of the 53 expired tax breaks, see Joint Committee on Taxation, List of Expiring Federal Tax Provisions 2010-2020 (JCX-2-11). See also Tax Policy Center.

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You imply that CBO is doing something shady when it assumes the expiration of those provisions. That is just silly. CBO is doing exactly what it should do - assuming that provisions set to expire will actually expire. If Congress wants to extend them, that's fine. But CBO can't assume that they'll be extended.

Posted by: SenateTaxGuy | Jan 1, 2012 2:47:48 PM

Hasn't the CBO started to get snarky in their reports regarding these sort of things. I remember hearing that the CBO put some caveats into the Health Care Bill when it talked about the "savings" in the program.

Posted by: Chris Smith | Jan 2, 2012 6:24:00 PM