26 Apr Anxious Over Tax Overhaul, Lawmakers Press for Stand-Alone Measures
A bill recently introduced in the Senate to give military spouses a small tax break has all the markings of a simple, inexpensive nod to a small constituency.
But it also was the latest sign that while tax writers in Congress are undertaking an ambitious plan for a tax overhaul, some lawmakers don’t want to wait for any grand bargain on taxes to push their own measures into law.
A series of stand-alone tax measures have been introduced in recent weeks that likely have little chance of passing through the tax barricade but put sponsors on the record with specific plans and, backers of the bills hope, give them a better chance of gaining approval over the long haul.
Finance Chairman Max Baucus of Montana has announced plans to retire but is making clear he will continue to hold up individual tax bills while he tries to build consensus for a tax overhaul.
In the meantime, Bob Casey, D-Pa., who is a tax writer, and Jerry Moran of Kansas, chairman of the National Republican Senatorial Committee, have taken the lead in recent days in promoting a proposal (S 759) to give military spouses more generous writeoffs for the cost of new professional licenses and certifications in different states.
The proposal is intended to help military families cover costs connected with moving to new base assignments.
It would provide more writeoffs for spouses for the costs of getting licenses in multiple states for jobs in professions such as building trades or real estate sales.
“I would hope that there might be a way to move it as a stand-alone or on another vehicle, not waiting for tax reform,” Casey said.
“It’s something that should come to the Senate and pass by unanimous consent,” Moran said. “It’s critical to improving in a small way the lives of our military families.”
Among the items being promoted for standalone action by lawmakers in both parties are proposals to provide more incentives to start-up businesses and permanent or long-term extensions of popular tax breaks for items such as the private mortgage insurance deduction, 15-year writeoffs for leasehold improvements, a number of small business tax breaks and the research-and-development tax credit.
Baucus and his House counterpart, Ways and Means Chairman Dave Camp, R-Mich., have made clear they will block individual tax proposals as they try to build consensus for a broad overhaul that would reduce the number of tax breaks for individuals and corporations.
House Majority Leader Eric Cantor of Virginia confirmed Wednesday that the push for one tax overhaul, not smaller tax measures, remains the House GOP game plan. “Chairman Camp is doing a great job in marshalling the troops in support of tax reform. And he’s got a good plan in working towards putting that into action,” Cantor said.
In the Senate, Majority Leader Harry Reid, D-Nev., has deferred to Baucus on most tax bills.
But the patience of party leaders ran out when Baucus argued that a proposal (S 336) to authorize states to enforce online sales tax collections by out-of-state vendors should remain in committee as part of the tax overhaul debate. Reid disagreed and moved an identical proposal (S 743) to the floor this week.
Although the bill technically is not a revenue measure — it would authorize states to collect existing sales taxes and not impose a new tax — it has gotten the notice of lawmakers who are tired of waiting for action on tax bills.
Rand Paul of Kentucky said in an interview Wednesday that he was pushing hard behind the scenes on his tax amendment to the online sales tax bill to cut the current 35 percent corporate income tax rate in half. “We should bring the rate down so that it is more in line with Canada,” said Paul.
Reid filed cloture on Wednesday, setting up a Friday vote, in a bid to head off the Paul amendments and other tax-related provisions not germane to the underlying measure.
Baucus, who announced plans to retire on Tuesday, said in an interview that he was continuing to push back against stand-alone tax bills as part of his efforts to build support for a tax overhaul.
Baucus said the Casey bill would get bogged down on the floor with amendments and should not get a free pass. “Senators will want to offer amendments. They won’t give unanimous consent.” he said.
Baucus said he still wanted to deal with pending tax proposals in one overhaul measure. “There’s a greater chance of passage,” he said.
Moran said lawmakers in both parties would give Baucus leeway to develop an overhaul but predicted increasing pressure for smaller tax bills if there are not clear signs of a big tax deal. “It’s growing,” Moran said.