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Business Tax Breaks of $310 Billion Spark Partisan Squabble

Tuesday, 29 Apr 2014 12:10 PM

April 29 (Bloomberg) -- The U.S. House Ways and Means Committee is heading toward approving $310 billion of tax breaks, as Republicans defeated Democratic objections to the plan’s budgetary costs.

The tax breaks, many of which benefit companies such as Intel Corp. and General Electric Co., have bipartisan support. How and whether to offset their cost remains an area of dispute.

The Republicans’ proposal would make the breaks permanent, ending the lapse-and-revive cycle that has persisted for years. The six breaks under discussion today and dozens of others expired Dec. 31. The move separates some of the breaks from Republicans’ broader goal of revamping the U.S. tax code.

“We have to start somewhere,” said Ways and Means Chairman Dave Camp, a Michigan Republican. “We’re starting with bills that have had bipartisan sponsors.”

Democrats argued that the Republican plan is fiscally irresponsible, because it doesn’t include offsetting spending cuts or tax increases, and unfair as Republicans maintain that the cost of extending unemployment benefits should be covered.

They also complained about the uncertain fate of other breaks, such as those for hiring workers from disadvantaged groups and installing wind turbines.

“To say that Republican action today is hypocritical is a serious understatement,” said Representative Sander Levin of Michigan, the top Democrat on the Ways and Means Committee.

Vote Breakdown

The panel voted 22-12 today to endorse the research credit’s permanent extension. One Democrat, Representative Earl Blumenauer of Oregon, voted with the Republicans. Two others -- Linda Sanchez of California and John Larson of Connecticut -- voted no even though they cosponsored the bill.

Beyond the research credit, the committee is considering a proposal to make permanent the active financing exception. That rule, supported by GE and banks such as Citigroup Inc., lets companies defer U.S. taxation on income they earn from finance businesses outside the country.

Other breaks set for votes today include a rule that lets small businesses write off some capital expenses and another that allows multinational companies to move money easily between subsidiaries overseas.

The Senate Finance Committee voted earlier this month to extend almost all of the expired breaks through 2015.

The bills under consideration are H.R. 4429, H.R. 4438, H.R. 4453, H.R. 4454, H.R. 4457 and HR 4464.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net Laurie Asseo

© Copyright 2017 Bloomberg News. All rights reserved.

   
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2014-10-29
Tuesday, 29 Apr 2014 12:10 PM
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