Republican leaders have signaled an interest in renewing dozens of expired tax provisions before they take control of the Senate in January.
Sen. Mitch McConnell (R-KY), who this week was unanimously elected to be the Senate Majority Leader when the 114th Congress convenes, listed a government spending bill and tax extenders as top priorities for the lame duck session that started yesterday.
Progress has been stalled this year on how to revive dozens of popular tax extenders for corporations and individuals that expired at the end of 2013. House Republicans have sought to make several corporate tax breaks permanent – including the business credit for research and development – while Senate Democrats have favored the EXPIRE Act, a bill introduced by Senate Finance Committee Chairman Ron Wyden (D-OR) that extends almost all of the tax extenders through 2015.
At a press conference in Louisville last week following his reelection, McConnell said the outgoing Congress should set a positive tone for 2015 and focus on clearing a tax extenders package in the remaining weeks of the year.
“There’s a whole lot of unfinished business sitting there, some of which it might be advantageous to get out of the way,” McConnell told reporters. “The Democrats may want to do [tax extenders] and we may want to do it in order to clear off some of the necessary work that’s simply been undone in the dysfunctional Senate.”
Wyden told POLITICO this week Democratic tax writers “know that we’re in a negotiation” and that he’s willing to consider making some of the tax provisions permanent, specifically mentioning the R&D credit.
But Republicans are also getting pressure from influential conservative groups to capitalize on their election victory by killing off some of the tax extenders they don’t like, such as the wind production tax credit that is seen as part of the Obama administration’s environmental agenda.
IRS Commissioner John Koskinen warned lawmakers last week that if Congress does not address tax extenders before December, it could greatly complicate the tax filing season and delay tax refunds.