Lawmakers involved in the negotiations regarding the tax extender bill say they are far from a compromise. Congress is still no closer to a suitable solution regarding legislation relating to tax extenders.
Congress’ Main Tax Priorities
Popular tax provisions such as the fuel tax credit, the markets tax credit, and the work opportunity credit ranked among the main tax priorities of Congress this year. They were only intended to be temporary provisions. Some expired in 2018, and others will expire at the end of this year. Congress has now made them one of its top priorities when it comes to tax-related matters. The other priorities include a few Tax Cuts & Jobs Act (TCJA) technical corrections, as well as some retirement incentives.
Democrats Support a Tax Extender Bill – with Major Concessions in Return
House Democrats have expressed their willingness to support the Tax Extender Bill. The Ways & Means Committee even advanced new legislation in June that renewed all expiring and expired provisions through 2020. Yet, the Democrats are also seeking some major concessions in return. They want to expand a number of other tax credits. These tax credits include dependent care, the child tax credit, and the Earned Income Tax Credit. They also want to grant loans to multiemployer pension plans that are in financial trouble. In addition, legislators want to lift the cap of $10,000 (at least in part) on local and state tax deductions enacted by the TCJA.
The Republican Viewpoint
Mostly, tax writers of the Republican Party have written off the Democrat’s proposal as a financial nonstarter. They cite the lack of adequate revenue offsets and high costs as the reasons for this write-off. While they are adamant in their opinions regarding the proposal, it shows that reaching an agreement will never be easy.
Time is Running Short to Reach an Agreement
Time is running out for Congress to find a consensus on the tax extender bill and other outstanding items regarding taxation. Congress’ final must-pass legislation this year is regarding the spending package. This, perhaps, is the vehicle that is most viable for tax bills. Government funding is going to run out soon. November 21 was the date on which this was to occur. As yet, there is no information regarding whether there has been an extension granted. It is possible, however, that a further temporary extension will last until December.
Could a Stand-Alone Tax Package be the Answer?
Should Congress fail to attach its tax legislation onto the spending bill, all is not lost. It is still possible that lawmakers could agree on a stand-alone tax package. Nevertheless, a number of lawmakers have expressed their concerns about Capitol Hill’s current environment. They have conceded the current state of play is not especially conducive to bipartisan, significant compromise. What remains clear is that Congress needs to get down to work, discuss the options, and reach an agreement soon.
For more information about this article, please contact our tax professionals at firstname.lastname@example.org or toll free at 844.4WINDES (844.494.6337).