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Tax Extenders Face Scrutiny at Ways and Means Hearing

Posted @ Thursday, March 15, 2018    By Aindriu Colgan
Posted in [ Blog, Energy, Water and Natural Resources, Transportation, Legislative, Tax ] | 0 Comments

Yesterday, the House Ways and Means Subcommittee on Tax Policy held a seven-hour, 4 panel hearing on the fate of tax extenders—temporary tax extenders like those for biofuels or short-line railroads. While they were just extended retroactively for 2017, they have again expired and currently are not available for 2018.

The hearing provided a venue for Republican committee members to criticize several aspects of tax extenders and argue for their permanent expiration. First, they argued that the temporary nature of the provisions severely limits the economic growth they are supposed to generate as businesses need to plan more than a year or two in advance. Second, they argued that if these businesses are profitable and/or these investments generate returns, there is no need for extra tax incentives. Lastly, they argued that the Tax Cuts and Jobs Act provided significant tax benefits to U.S. businesses (including a 43% reduction in the corporate tax rate) and that those benefits should negate any need for special tax treatment. Chairman Buchanan specifically criticized companies for “double dipping.”

All this is to say, that the House Ways and Means Committee would like to eliminate almost all of the tax extenders. Yesterday was their first step in making that argument.

It is important to remember, however, that the Senate has a different view of tax extenders, which is why they were not addressed in the Tax Cuts and Jobs Act. Any efforts by the House to eliminate and/or let tax extenders expire will run into resistance in the Senate.

 

 

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