The last-minute bill would extend the expired tax breaks through the end of the year, enabling taxpayers to claim them on their 2014 tax returns. Beyond this year, their fate will once again be uncertain.
The package now goes to President Barack Obama, who is expected to sign it. It would add nearly $42 billion to the budget deficit over the next decade, according to congressional estimates.
The 54 tax breaks benefit big corporations and small businesses, as well as struggling homeowners and people who live in states without a state income tax. More narrow provisions include tax breaks for filmmakers, racehorse owners and rum producers in Puerto Rico and the Virgin Islands.
The Senate voted 76-16 to approve the package Tuesday evening as lawmakers rushed to finish their work before heading home for the holidays. The House passed the bill earlier this month.
Lawmakers from both political parties said they were disappointed they were unable to extend the tax breaks beyond this year.
"This package of incentives — which applies only to 2014 — will last two more weeks before families and businesses will be thrown back into the dark about what taxes they owe," said Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee. "This tax bill doesn't have the shelf life of a carton of eggs."
Congress routinely extends the package of tax breaks every year or two. But they were allowed to expire in January.
Technically, the bill is a one-year, retroactive extension of the tax breaks, even though it only lasts through the end of the month.
"This bill represents the worst habits in Washington," said Sen Tom Coburn, R-Okla. "Politicians in a lame duck, end-of-the-year session, passing out goodies to well-connected industries instead of lowering tax rates for all Americans."
Business groups have complained for years that the patchwork of temporary tax breaks makes it difficult for them to plan. Still, in a letter to senators, the National Association of Manufacturers supported the bill because it would "prevent immediate tax increases on thousands of manufacturers that benefit from these temporary provisions."
House Republicans and Senate Democrats negotiated to make some of the tax breaks permanent. But talks faltered after the White House threatened to veto an emerging package, saying it too heavily favored big corporations over families.
House Republicans responded by passing a one-year bill, figuring they will have more influence over the package next year, when Republicans take control of the Senate.
"My only hope is that in the new Congress we can make strides toward putting some certainty back in the tax code," said Sen. Chuck Grassley, R-Iowa.
Among the biggest breaks for businesses are a tax credit for research and development, an exemption that allows financial companies such as banks and investment firms to shield foreign profits from being taxed by the U.S., and several provisions that allow businesses to write off capital investments more quickly.
There is also a generous tax credit for using wind farms and other renewable energy sources to produce electricity.
The biggest tax break for individuals allows people who live in states without an income tax to deduct state and local sales taxes on their federal returns. Another protects struggling homeowners who get their mortgages reduced from paying income taxes on the amount of debt that was forgiven.
Other provisions benefit commuters who use public transportation and teachers who spend their own money on classroom supplies.
Original Article
Source: huffingtonpost.com/
Author: STEPHEN OHLEMACHER
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