There was rare agreement across the political spectrum at the House Ways and Means Tax Policy subcommittee hearing this week, with policy experts from Heritage Foundation, the Institute on Taxation and Economic Policy, the Center for American Progress, Taxpayers for Common Sense and the Committee for a Responsible Federal Budget supporting the elimination of “tax extenders” – the supposedly temporary tax breaks for special interests that tend to stick around, extended by Congress year after year.
The bipartisan budget deal passed in February revived 36 special tax breaks that had expired at the end of 2016, extending them retroactively to 2017. The hearing on Wednesday was dedicated to determining whether these “temporary” tax breaks, which cost the government billions in lost revenues, still make sense given the recent overhaul of the tax code.
To the policy experts appearing before the panel, the answer was obvious: tax extenders have to go. If a tax break makes sense, they argued, it should be built into the tax code. All other special breaks should be allowed to expire.
Maya MacGuineas of the Committee for a Responsible Federal Budget highlighted the bipartisan agreement on the issue: “Here you have a panel that is unbelievably diverse, I would bet we could not agree on much of anything, except we’re all here with no skin in the game saying that this is not a way to do tax policy.”
Not surprisingly, the companies that benefit from the tax breaks had a different perspective. Representatives from industries as diverse as railroads, biofuels and real estate explained to the committee why their particular tax extenders were both wise and just, with reasons ranging from job creation to the promotion of economic efficiency. Eliminating the extenders, they warned, could have unintended, harmful consequences.
While the policy experts have made their views clear, the elimination of the tax break extenders is still an open question, dependent on lawmakers’ ability to develop the backbone necessary to say no to the special interests who benefit from them.
In the meantime, while we wait for members of Congress to grow the necessary spinal material, the Center for Public Integrity has published a comprehensive guide to 33 of the tax breaks that are currently in play, with beneficiaries including craft beer brewers, race horse owners and StarKist tuna canners. The details will amaze you.