GUEST EDITORIAL
‘Tax extender’ turkey
5/23/2014The Senate has fallen apart over a full-employment plan for lobbyists, also known as the “tax extenders” bill.
The legislation would have renewed for two years more than 50 tax breaks that expired in 2013, at a 10-year cost of $85 billion. Taxpayers don’t have to file their returns for 2014 until April 15, 2015, and the law would be retroactive.
The measure passed the Finance Committee last month, enjoyed bipartisan support, and seemed headed to a vote on the floor — until Republicans filibustered this month, because, they said, Senate Majority Leader Harry M. Reid (D., Nev.) would not let them offer amendments. Apparently, the GOP wanted to hold a vote on repealing the medical-device tax, which helps finance the health-care reform law.
There may be no tax extenders bill until after the November election, unless the two parties can resolve this kerfuffle. The impasse is causing great upset among the special interests — from wind-energy companies to stock-car racing — that live off its provisions.
A delayed extenders bill endangers broader corporate provisions as well. These include the widely used and economically defensible research and development tax credit.
The best that can be said for the Senate bill is that its sponsor, Sen. Ron Wyden (D., Ore.), swears it’s the last such smorgasbord of his finance chairmanship and, therefore, the prelude to tax reform. Maybe.
What’s certain is that Mr. Wyden was unable to sell his colleagues on a way to pay for the bill, so its entire cost would add to the federal deficit. This is fiscal irresponsibility, pure and simple.
Meanwhile, the GOP-led House is voting on extending the various tax breaks one by one, starting with a permanent, but unpaid-for, extension of the R&D credit — despite a veto threat from President Obama. The White House is unhappy with the cost of the Senate bill too, but it didn’t threaten a veto, in deference to its Democratic allies in that chamber.
This may be one of those times when no bill is better than a bad bill. It won’t be the end of the world if the House and Senate have to ponder this turkey a while longer. They may come up with a way to pay for it — or even the gumption to end the absurd annual “tax extender” ritual.