Lawmakers are likely to pass tax extender legislation during the lame-duck session of Congress in November and comprehensive tax reform as early as 2015, according to tax experts speaking during webcast sponsored by PricewaterhouseCoopers LLP on October 28. According to Rohit Kumar and Scott McCandless, both principals in PwC’s Tax Policy Services Practice, the Senate version of the tax extenders bill, the EXPIRE Bill of 2014 (Sen 2260) will be the legislative vehicle that moves forward in November. However, lawmakers are likely to include some portions of the House-passed tax bill, the Jobs for America Bill of 2014 (HR 4).
The lack of a revenue offset will not stop passage of the tax legislation, even though the White House has issued a veto threat against the House extenders package, Kumar predicted. Since both the House and Senate measures lack offsets, the only question is how much revenue will be lost in the final bill, according to the experts. Kumar was formerly the deputy chief of staff and domestic policy director for Senate Minority Leader Mitch McConnell, R-Ky. McCandless served as a tax counsel in both the House and Senate.
According to the Senate Finance Committee, Sen 2260 would cost approximately $84.1 billion for a two-year extension of the extenders, including a one-year retroactive extension. The bill includes business, individual and energy extenders, with the most expensive measure being extension of the research tax credit.
The Joint Committee on Taxation estimated that the 10-year cost of extending tax provisions (bonus depreciation, research credit, Code Sec. 179 expensing) in HR 4 would be nearly $500 billion. The Obama administration cautioned House lawmakers in September that making traditional tax extenders permanent without offsets represented the wrong approach.
Provided by CCH
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