The new chairman of the Senate Finance Committee plans to move next week to revive an array of tax breaks that expired in December, pleasing industry lobbyists but disappointing House Republicans, who have not abandoned their quest for full-blown tax reform.
Sen. Ron Wyden (D-Ore.) plans Monday to unveil a proposal to temporarily extend the breaks, which include such popular policies as a credit for corporate research and development, an incentive for commuters who use mass transit and a special deduction for sales tax in states such as Florida and Texas, which do not tax income.
Democratic aides said Wyden plans to ask the committee to vote separately on some of the more controversial provisions. For instance, senators will be asked whether to revive a much-maligned break to promote development at NASCAR racetracks, as well as a credit for the purchase of electric motorcycles and golf carts that barely survived a 2012 effort to weed out special-interest provisions.
However, Democratic aides expect the entire list of temporary tax policies — known as “tax extenders” — to emerge intact from the committee, adding nearly $50 billion to this year’s budget deficit.
Wyden, who took over as head of the panel this year when Sen. Max Baucus (D-Mont.) resigned to become ambassador to China, said Wednesday that extending the provisions would boost the economy and clear the way for a comprehensive rewrite of the tax code.
“I want to make sure that the way these are handled will protect our communities, protect our workers and serve as a springboard to tax reform,” Wyden told reporters. He said that senior Senate Republicans are working with him to advance the package.
“This is part of an effort that [will] deal with the economy and jobs that could vanish if you didn’t deal with it,” Wyden said.
The effort faces an uncertain fate in the House, where Ways and Means Committee Chairman Dave Camp (R-Mich.) last month released an ambitious blueprint for tax reform that would curtail numerous breaks and use the proceeds to lower the federal income tax rate for most taxpayers to 25 percent or less.
As he continues to press the case for tax reform, Camp said he plans to scour the list of tax extenders “policy by policy,” with an eye toward reviving only those that “should be made permanent.”
“A short extension of tax policies is no way to legislate and is even worse for the families and businesses who utilize those tax benefits,” he said in a statement.
Ed O’Keefe contributed to this report.