12 March 2019 Ways & Means temporary tax hearing focuses on TCJA, extenders The House Ways and Means Select Revenue Measures Subcommittee hearing on March 12, 2019, on "Temporary Policy in the Internal Revenue Code" continued the partisan debate over whether the Tax Cuts and Jobs Act (TCJA), under which some corporate provisions are permanent but individual provisions expire, has been beneficial, along with discussion of the tax extenders and disaster relief. The hearing follows the February 28 introduction by Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) of a bipartisan bill (S. 617) to retroactively extend, through the end of 2019, 26 tax provisions that expired at the end of 2017, plus three that expired in 2018. An extenders bill has not yet been introduced in the House, and the hearing was seen by some as a precursor to that action. In an opening statement, Chairman Mike Thompson (D-CA) said the cost of making every expiring provision in the TCJA permanent is estimated at $2.5 trillion over 10 years, and in weighing the extension or modification of those and other expiring policies, the Committee must have a commitment to fiscal responsibility and "an understanding that the corporate tax rate could never have been lowered from 35% to 21% without the use of fiscal gaming that shortchanges families and small businesses." Ranking Member Adrian Smith (R-NE) said it is disappointing an extenders bill could not be enacted last year, and now industries are now in their fifteenth month without an extension and with no solution in sight. At the end of the hearing, Smith suggested that re-litigating the TCJA is probably not the best use of the Committee's time, and that his constituents are more concerned with extending the biodiesel tax credit and short-line rail tax credit, as well as the clarification that qualified improvement property (QIP) is 15-year property under the modified accelerated cost recovery system and 20-year property under the alternative depreciation system.
In testimony, Mazur urged lawmakers to enact fewer temporary provisions, pair each temporary tax provision with a serious evaluation of its effectiveness, and not to extend temporary tax provisions retroactively. Olson said to be sustainable, tax and spending policies should: (1) make the United States an environment that attracts and retains business investment leading to an economy that grows and creates jobs; and (2) be seen as fair in the eyes of the public. Huang outlined what she said are sources of unfinished business stemming from the 2017 TCJA, including uncertainty surrounding the tax extenders and individual TCJA provisions set to expire after 2025. She said an extenders package should be accompanied by expanding the Earned Income Tax Credit for childless workers and expanding the Child Tax Credit. Pomerleau called on Congress to let the tax extenders expire permanently, and to make permanent the beneficial provisions of the TCJA. During questioning, Chairman Thompson noted there is no disaster tax relief in place for those that have dealt with recent disasters and said that enacting such legislation would be beneficial. Rep. Lloyd Doggett (D-TX) called for a rigorous examination of the tax extenders, and Mazur agreed that a move could ensure the provisions have their intended effect. Rep. Darin LaHood (R-IL) submitted a letter in support of the biodiesel tax credit, which he said, for a large district like his with corn and soybean production, is extremely beneficial. Rep. John Larson (D-CT) asked whether the TCJA created more or less certainty in the tax code. Mazur said both, and that it produced certainty for corporations, and certainty for individuals through 2025. Huang said overall the TCJA resulted in less certainty. Rep. Linda Sanchez (D-CA) said the TCJA gave multinational corporations a permanent tax cut, while leaving individual provisions temporary. Rep. Donald Beyer (D-VA) asked about the prospect of limiting fossil fuel tax credits to pay for policies that reduce our carbon footprint. Mazur said tax benefits for fossil fuels are a good place to look to pay for such policies. Rep. Thomas Suozzi (D-NY) asked whether the Work Opportunity Tax Credit is a benefit for certain workers. Olson agreed the provision has helped employ many people and should be looked at carefully by Congress. Rep. Jackie Walorski (R-IN) said there is a danger in the lack of certainty for businesses that rely on extenders like the credits for short-line railroads and biodiesel. Opening statements are attached. Testimony is available here.
Document ID: 2019-0528 | |||||
