(Bloomberg) The U.S. House Ways and Means Committee voted to revive and permanently extend six lapsed tax breaks that would help small businesses and people who make charitable contributions.
The tax benefits expired at the end of 2014 and are among several dozen provisions that Congress has routinely extended after allowing them to lapse.
“We’ve all been down this road so many times—retroactive extensions, uncertainty,” said Representative Paul Ryan, a Wisconsin Republican and chairman of the Ways and Means Committee. “Let’s make these permanent. Let’s give people certainty.”
The committee split along party lines, rekindling a dispute over how to revamp the U.S. tax system. Democrats said they support the specific provisions though would rather consider them as part of broader tax-code changes.
The largest break would let small businesses write off their capital investments immediately instead of deducting them over several years.
Others provide incentives for donating the development rights to land, donating food inventory and making charitable contributions directly from tax-advantaged retirement accounts. The other two benefit S corporations. At least four of the bills are scheduled for House votes this month.
Democrats criticized the Republicans’ piecemeal approach and lack of provisions to offset the lost revenue.
The bills—plus another approved measure that would change tax rules for private foundations—would cost the government $93.5 billion in forgone revenue over the next decade.
Helter Skelter
“The helter-skelter approach being taken today only serves to leave behind vital provisions that help hard-working American families,” said Representative Sander Levin of Michigan, the top Democrat on the committee.
Representative Richard Neal, a Massachusetts Democrat, said he was concerned that the Republican approach on the breaks would hurt the broader effort to revise the business tax system.
Ryan said the committee would work on both tracks at the same time. Permanently extending these tax breaks, he said, would make revenue projections more realistic because Congress has routinely passed them and will probably keep doing so.
The bills are H.R. 629, H.R. 630, H.R. 636, H.R. 637, H.R. 640, H.R. 641, and H.R. 644.
