House Republicans on Thursday were gearing up to vote on the first of several measures to make various tax cuts, which have previously been renewed annually -- permanent. The first vote, on breaks for charitable giving, is relatively small, at about $14 billion over ten years. But taken as a whole, the total climbs into the hundreds of billions of dollars.
However, a number of groups in Washington have argued strenuously against the Republican approach, pointing out that the tax cuts under consideration, which include a large expansion of the business research and experimentation tax credit, and breaks for state and local sales taxes, are not paid for and will add to the federal deficit.
What’s more, it removes leverage that could be used to convince certain interest groups to go along with full-blown reform of the U.S. tax code, which hasn’t been overhauled in a generation, when and if lawmakers get around to debating it.
“Making the extenders permanent without paying for them is costly, biases tax reform against reducing deficits, and prioritizes corporate tax breaks over tax credits that help millions of low- and moderate-income working families,” wrote Brandon DeBot, a researcher with the Center on Budget and Policy Priorities. “This is why policymakers should reject today’s package of charitable provisions, regardless of whether they support it on policy grounds.”
“If you add up all the bills under consideration by the House Ways and Means Committee and throw in interest costs, that’s about a $400 billion addition to the federal debt -- and that’s not something we can support,” said Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget. “Some of these are good policy, and some aren’t but the right place to have this discussion is in the context of broader tax reform.”
On Tuesday, the White house promised that President Obama would veto the tax extender bills.
“House Republicans are making clear their priorities by rushing to make these tax cuts permanent without offsets when key tax credit improvements benefiting 16 million working families with children are scheduled to expire,” the White House said in a statement.
“They are also seeking to impose a double standard by adding to the deficit to continue and create tax breaks that primarily benefit higher-income individuals, after insisting on offsetting the cost of measures that help middle-class and working Americans, such as the extension of emergency unemployment benefits,” the statement said.
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