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Monday, August 4, 2014

NPR: Tax Extenders Bill Killed by Politics on Capitol Hill

NPR -- It's All Politics,  A Tax Bill Killed By The Push And Pull Of Politics On The Hill:

NPRA few months back, Sen. Ron Wyden, a Democrat from Oregon, brought a bill to the floor that basically offered tax incentives to businesses and individuals. Those incentives are called tax extenders.

They include big stuff and small stuff — tax breaks for wind farms, tax breaks for schoolteachers who buy their own supplies. Tax breaks for rum producers in Puerto Rico, people who make movies, race track owners, even some breaks for people who bike to work. In other words, something for every lawmaker to take home.

This should have been a slam dunk. And at first, it was. Ninety-six senators gathered in the chamber shortly after Wyden's speech, and all voted in favor of moving the bill forward. But two days later, this bill, with 96 out of 100 supporters, was stopped cold. To anyone watching, it might have looked like some special kind of insanity.

But Howard Gleckman, a senior fellow with the tax policy center at the Urban Institute, says look closer.

"This is all fairly well planned," he says. "This isn't World War I, where we kind of accidentally stumbled into a catastrophe." He says he does understand how frustrating it is for Americans to watch this process: "It's either frustrating or amusing. If you actually watch this on C-Span and you don't get the joke, it has to be very frustrating."

(Hat Tip: Ann Murphy.)

http://taxprof.typepad.com/taxprof_blog/2014/08/tax-extenders-bill-.html

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Comments

Good riddance! Our tax code is far too complex as it. This scheme only makes it worse.

Teachers shouldn't have to buy their own supplies. Wind farms should stand or fall or their own economic good sense. And why subsidize Puerto Rico rum but not a microbrewery in an economically blighted region of the U.S.? It was symbolic of just how messed up our tax code is. Perhaps its good that it died and better if it never comes up again.

And what the heck are we doing hanging on to Puerto Rico anyway? Let them become their own country and decide for themselves how much they tax rum.

This article doesn't mention why the bill was killed. It wasn't for the reasons I have mentioned above. Orrin Hatch wanted to amend it to kill the Obamacare tax on medical devices. Harry Reid killed the bill rather than let that be voted on.

Here is a bit more specific description:

"Behind the scenes, staffers say Reid couldn't afford to let the medical device tax get a vote. He has several Democratic senators in tough re-election races in states with medical device companies. No contested Democrat wants to take a position on something like that in an election year. Reid had a choice to make, and it was an easy one. His priority is to protect the Democratic majority in the Senate, even at the expense of a popular tax bill. Even at the expense of C-Span viewers shaking their heads at what could seem like kindergartners on a playground."

I suspect the real issue isn't taxes in general or even that election but Obamacare. From the perspective of Democratic party leaders, any change to that hastily passed bill is like the camel's nose in the tent. Change anything and the entire monstor could quickly collapse.

Posted by: Michael W. Perry | Aug 4, 2014 3:12:19 PM