CHN: Senate and House Leadership Look to Pass More Tax Breaks – Still Not Paid For
House and Senate leaders are pushing this week for a floor vote to extend expiring tax breaks. The three popular middle class tax breaks that are set to expire at the end of this year unless action is taken include tax breaks for married couples, the $1,000 per child tax credit, and the ten percent income tax bracket. Legislators may also consider extending for one year expanded exemptions for the Alternative Minimum Tax (AMT).
It is unlikely the tax bill would be paid for. Not yet clear is how long the bill would extend the tax breaks – House Republicans proposed a two year extension at the end of last week – or if the package would include more give-aways to the wealthiest taxpayers. Extending the three tax breaks for two years is estimated to cost at least $75 billion; a five-year extension may cost as much as $120 billion. Earlier this summer the House passed three separate bills extending the expiring tax breaks; none of those bills were paid for. The House-passed bill extending the child tax credit (HR 4359) greatly expanded the eligibility for the credit to wealthy families making as much as $290,000 per year while doing very little for the lowest income families.
Senate Finance Committee Chairman Charles Grassley (R-IA) and House Ways and Means Committee Chairman Bill Thomas (R-CA) are working to iron out a tax plan that can be attached to a child tax credit bill (HR 1308) that cleared both the House and Senate last year and was awaiting conference. The clever procedural maneuver is aimed at moving a bill very quickly directly to the Senate floor before the August recess and the party political conventions without having to first make it through the Senate Finance Committee. At least two of the four Republican Senators who earlier objected to a budget resolution that opened the door for tax cuts without paying for them have said they would support extending the three expiring tax cuts, even if they are not paid for.
Last week, the Fair Taxes for All Coalition sent a letter to the Senate urging Senators to reject a bill that is not paid for. Rather than helping some of the most vulnerable families, the continued extension of these tax breaks will contribute to the record deficit, jeopardizing the ability of the federal government to meet needs for education, health care, child welfare, child care and other services.
Advocates are urged to call their Senators (Capitol switchboard phone number is 202-224-3121) and urge them to reject efforts to use the extension of these three provisions as cover for a needless increase in tax breaks for the wealthy. Enacting additional unpaid-for tax breaks for the wealthy, while forcing deep cuts to programs that provide health care, education, child care, and other services for the most vulnerable families is reckless.
For More Information
Center on Budget and Policy Priorities: New Gambit to Pass Tax Cut Extensions Represents Unsound Policy