Blogs Derek's Tax Blog Tax Breaks Heading House Floor
Charles Rangel, D-N.Y., intends to introduce legislation in December directly to the floor of the house that would keep a variety of tax breaks from expiring before the end of the year instead of having it go through the House Ways and Means Committee which he Chairs.
There are about 73 tax provisions scheduled to expire by Dec. 31, including the credit for research and experimentation expenses, deductions for tuition and state and local taxes, film and TV production expensing rules, a deduction for contributions of food inventory, tax breaks for certain expenses by school teachers, and a host of other goodies. - From Michael Cohn's WebCPA post.
Will this bill include an extension of the current estate tax exemptions into next year? Maybe, but it is undecided. However, earlier this week this week it appeared that a permanent estate tax bill would not be coming out of the Ways and Means Committee this year. Could the fact that Rangel is planning bypass his committee with this extension legislation mean that the divide in the committee is growing?
There is also some reason to believe that Ways and Means may try again for a permanent bill this year. From Bloomberg:
Committee member Chris Van Hollen of Maryland said the panel also is leaning toward passing a new, permanent estate tax instead of a one-year measure to keep the current levy from expiring next year.
“That would be the prevailing view,” Van Hollen said. Another option, he said, would be to enact a multiyear extension of current law to ensure there is consistent tax treatment of large estates over the next several years.
We can only speculate on what the multiyear extension would look like. However, since the fiscally conservative Blue Dogs are still fighting for statutory PayGo and President Obama has expressed concern about growing deficits, it could mean that there is not enough revenue available to pay for a permanent $3.5 million exemption. Perhaps committee is considering a bill that would allocate the revenue gain from the 2010 estate tax increase to the revenue loss of a 2011 estate tax cut. I will need to look back at the budget projections to see how much could be offset in that way.