In Congress, both parties have expressed widespread support for improving the treatment of R&D and potentially extending some or all of the major business provisions, while the White House and congressional Democrats have indicated interest in an expanded child tax credit, suggesting potential for a deal.
6 min read
Two weeks after the 2022 midterm elections, it’s becoming clearer where tax policy may be headed for the rest of the year and into 2023. In the short term, Congress must deal with tax extenders and expiring business tax provisions that may undermine the economy.
5 min read
The 2022 midterm elections are wrapping up, and taxpayers are looking at a divided Congress for the next two years. Senior Policy Analyst Garrett Watson sits down with Jesse to give a quick analysis of what these elections mean for tax policy.
Policymakers face a difficult balancing act this year in what is likely to be an unusual tax extenders season.
6 min read
From the Tax Cuts and Jobs Act in 2017 to the Inflation Reduction Act, signed into law just this summer, lawmakers across the political spectrum are often tempted to implement temporary tax reforms. Garrett Watson joins Jesse to discuss the pros and cons of writing tax laws that have an end date and why we find ourselves having a debate at the end of each year about so many temporary provisions.
Tax extenders this year can be split into three rough groups: expiring parts of the Tax Cuts and Jobs Act (TCJA), expiring parts of various COVID-19 economic relief packages, and the Island of Misfit Extenders.
8 min read
As the Biden administration turns toward infrastructure, Sen. Ron Wyden (D-Or.) has suggested including reforms to the way the tax code subsidizes energy production in such a package, eliminating 44 “tax breaks” for various activities in the energy sector and replacing them with only three.
3 min read
Tax extenders are no stranger to hitching a last-minute ride on year-end legislation. This year they made another last-minute appearance, finding a hold in their own division of the 5,593-page bill to fund the government through the fiscal year and provide additional coronavirus relief through March.
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While a sweeping tax policy bill is unlikely in the near future, lawmakers may be able to come together on a smaller scale. Pairing better cost recovery on a permanent basis with support for vulnerable households as well as additional pandemic-related relief would help promote a more rapid return to growth and help businesses and households weather the ongoing crisis.
4 min read
At the end of 2020, 33 temporary tax provisions are scheduled to expire at the federal level. These provisions generally fall under four categories: cost recovery, energy, individual, and other business provisions.
20 min read
President Biden and Congress should concentrate on areas of common ground, finding incremental places to improve the tax code. A bipartisan bill recently introduced to help retirement savings is a good model for what incremental reform may look like.
4 min read
Congress should allow these tax extenders to expire and instead focus on making permanent features of the tax code that move it toward a more ideal system, such as full expensing.
12 min read