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September 23, 2013
Baucus Not Planning to Mark Up Separate Tax Extenders Bill This Year
by Lindsey McPherson

Full Text Published by Tax Analysts®

Senate Finance Committee Chair Max Baucus, D-Mont., told Tax Analysts September 19 that he does not plan to have his committee mark up a separate tax extenders bill to renew tax provisions that expire at the end of the year.
"We're sticking with tax reform," he said. "I'm not going to reward bad behavior."

"Bad behavior," Baucus explained, is a reference to lawmakers who don't want to get on board with tax reform and instead just want to fall into a pattern of renewing expiring tax provisions every year. He said tax reform would resolve the extenders problem by making permanent some tax provisions while eliminating others.

Baucus said he is still aiming for the Finance Committee to mark up a tax reform bill this fall.

Other taxwriters Tax Analysts interviewed about what should happen to tax extenders seemed to be on the same page as Baucus.

Finance Committee ranking minority member Orrin G. Hatch, R-Utah, said he agrees with Baucus that tax extenders should be addressed as a part of comprehensive tax reform. "He's the chairman and he's going to make that determination how we address them," Hatch said. "I'll be ready to move no matter which way it goes."

Committee member Rob Portman, R-Ohio, said he hopes Baucus's inaction on extenders will encourage lawmakers to focus on permanent tax reform. "I think it's the right approach to take now with the hope that would encourage us to do the right thing, which is to make the good laws permanent and to stop this uncertainty that accompanies the extenders debate every year," he said.

However, if 2013 is drawing to a close and tax reform looks unlikely to move forward, extenders will need to be looked at, Portman added, noting he is especially concerned about the research credit.

"There's no plan B, but I would think if it becomes unlikely we can get a major bill, we'll put together an extenders package," said Finance member Benjamin L. Cardin, D-Md.

While noting that he is concerned about extenders, Cardin added that "the fact that there's been very little discussion I think points out that it's usually considered noncontroversial to at least get the extenders done."

Other taxwriters were also wary of allowing the year to end without a renewal of the expiring tax provisions.

"If we get to a point where the tax extenders are going to expire and we are not close to moving some other kind of tax legislation, then I think we should extend them," said Finance member Mike Crapo, R-Idaho, adding that Congress needs to end the practice of retroactively renewing the extenders.

House Ways and Means Committee member Richard E. Neal, D-Mass., said there have been no discussions about backup plan for extenders but he would like to see something done this year if tax reform should stall.

"I'd always prefer these things happen before the year[-end]," said Ways and Means member Kevin Brady, R-Texas, adding that even passing extenders at the end of the year makes it difficult for tax planning.

Ways and Means Committee Chair Dave Camp, R-Mich., told reporters September 10 that he did not have a backup plan for addressing extenders outside of reform but noted that he is aware something will need to be done to address the expiring tax provisions.

W&M Has JCT 'Working Overtime'

Camp told Tax Analysts that he canceled a planned September 19 meeting of committee Republicans -- one in a series of tax reform meetings the GOP Ways and Means members are holding to start piecing together a tax reform draft -- because the committee does not have all of the data it requested from the Joint Committee on Taxation needed "to really have a meaningful conversation."

But there aren't any major hiccups in the process, Camp said. "We've asked JCT to do a lot," he said. "They're working very hard. They're working overtime."

Camp said the committee has requested that the JCT provide estimates on the effects of tax policy, saying the estimates will be an important part of the decision-making process. He did not specify what policies he is having the JCT score.

As of mid-afternoon September 19, Camp said he had not decided whether the Republican members of the committee would hold a tax reform meeting planned for the next day.

Asked how detailed the discussions in the meetings have been thus far, Camp said, "There's not a bill. We're talking concepts." He added that there's a lot left to discuss and that drafting a bill "is going to take a while."

Coalitions for Comprehensive Reform

Two tax reform coalitions urged lawmakers September 19 to pursue a comprehensive overhaul of the tax code. The Reforming America's Taxes Equitably Coalition, a group of more than 30 companies calling for a lower marginal corporate tax rate, and the Coalition for Fair Effective Tax Rates, a group focused mainly on comprehensive reform, appeared at a joint press conference.

"Revenue-neutral, comprehensive tax reform will allow businesses to focus on the bottom line and not on decoding an out-of-date and increasingly complex tax code," said Bill Hughes, a co-chair for the Coalition for Fair Effective Tax Rates and vice president of the Retail Industry Leaders Association.

Meg Shreve contributed to this report.

Follow Lindsey McPherson (@lindsemcpherson) on Twitter for real time updates.

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