May 14, 2014 in Business

Senate to begin debate on tax break renewal

Associated Press
 

WASHINGTON – A bill to renew more than 50 expired tax breaks for businesses and individuals cleared a key hurdle in the Senate Tuesday, giving hope to millions of taxpayers who would otherwise be hit with unwelcome tax increases next spring.

Other hurdles remain, however.

The Senate voted 96 to 3 to open debate on the bill, which has strong backing from the business community but would add about $85 billion to the budget deficit.

Almost every year, Congress routinely renews the tax breaks. This year they were allowed to expire at the start of the year – meaning taxpayers would get hit when they file their 2014 returns next spring. The Senate bill would extend the tax breaks through 2015.

The package includes a business tax credit for research and development and a sales tax deduction for individuals who live in states without an income tax. There is a generous tax credit for using wind farms and other renewable energy sources to produce electricity, and several provisions that allow businesses to write off capital investments more quickly.

One provision protects struggling homeowners who get their mortgages reduced from paying income taxes on the amount of debt that was forgiven. Others include narrow tax breaks for film and theater producers, NASCAR race track owners, makers of electric motorcycles and teachers who spend their own money on classroom supplies.

The tax breaks enjoy broad bipartisan support. But some Republican senators want the opportunity to change the package, and it’s not clear whether Senate Majority Leader Harry Reid, D-Nev., will allow amendments.

Republican amendments include making some of the tax cuts permanent while adding others, including the repeal of a medical device tax that helps fund President Barack Obama’s health law.

© Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


There is one comment on this story. Click here to view comment >>

Get stories like this in a free daily email