Members of the current lame-duck Congress should deal with the issue of so-called tax extenders — around 55 specific tax breaks that expired at the end of 2013.
They can do it the easy way, the hard way or not at all. Which would you guess they’ll pick?
Your guess is about as good as anyone’s right now.
For Texans who itemize deductions on their federal income taxes, the choice of what should happen ought to be easy. Their deduction for state and local sales taxes is one of the tax breaks that have expired.
Restoring it would mean an average deduction of almost $400 for those taxpayers.
This particular tax break is a matter of fairness. People who pay state income taxes can deduct them on their federal returns, so those where state and local government operations are financed through sales taxes should also be allowed deductions.
It simply should happen, and the Texas delegation in Congress is responsible for seeing to it.
It’s not easy. Each of the 54-or-so other extenders has a constituency, so Congress tends to look at them all at the same time.
They’re called extenders because they’re passed as short-term tax measures with nominal expiration dates, but then they get extended every couple of years.
It’s a budget trick. If they were passed as permanent deductions, budget hawks would insist on matching cuts in expenditures so as not to worsen the deficit.
This way, everybody gets to cover their eyes and pretend there’s no long-term impact.
The list includes breaks for teachers who pay out of pocket for classroom expenses; college tuition and fees; private mortgage insurance; energy-efficient home improvements; and costs for commuters.
One that’s drawn a lot of controversy, as well as opposition from big-time Republican donors, is a tax break for wind energy suppliers. Other business-specific breaks are also included.
It’s all in lieu of comprehensive tax reform. Anything with the term comprehensive in front of it automatically means the hard way, even the impossible way, in Congress of late.
Still, there are those who believe that nothing should be done to extend the expired breaks this time around, in hopes that the Republican majority in Congress next session can accomplish comprehensive reform.
Others see enough problems in the list of extenders that they want them all to go away. Some see comprehensive reform as a good excuse to do nothing at all.
The comparable “easy” approach is to extend all the breaks for another year or two and then let the Republican Congress have a stab at comprehensive reform.
Time is short. Internal Revenue Service Commissioner John Koskinen has said Congress needs to act on the extenders by the end of this month or risk delaying the start of the tax-filing season in January.
That’s not good. It’s time to act.