Ways and Means Committee Approves Extenders Package

April 30, 2014

Kyle Pomerleau

Kyle Pomerleau

Yesterday, the House Ways and Means Committee voted to permanently extend a number of the currently expired “tax extenders.” The committee approved a total of six tax provisions that expired at the end of 2013.

Tax Extender Bills Approved by House Ways and Means Committee (April 29, 2014)

  

Bill Number

Title

Ten Year Cost

HR 4429

“To amend the Internal Revenue Code of 1986 to permanently extend the subpart F exemption for active financing income.”

$58.8 billion

HR 4438

“To amend the Internal Revenue Code of 1986 to simplify and make permanent the research credit.”

$155.5 billion

HR 4453

“To amend the Internal Revenue Code of 1986 to make permanent the reduced recognition period for built-in gains of S corporations.”

$1.5 billion

HR 4454

“To amend the Internal Revenue Code of 1986 to make permanent certain rules regarding basis adjustments to stock of S corporations making charitable contributions of property.”

$0.7 billion

HR 4457

“To amend the Internal Revenue Code of 1986 to permanently extend increased expensing limitations, and for other purposes.”

$73.1 billion

HR 4464

“To amend the Internal Revenue Code of 1986 to make permanent the look-through treatment of payments between related controlled foreign corporations.”

$20.3 billion
 

Total Cost

$309.9 billion
Many of the 55 tax provisions that expired in January are economically distortive. However, a select few should be extended and made permanent. These help make the tax code more neutral by mitigating the tax code’s biases against saving and investment (List Here). The approved provisions generally fall under the umbrella of extenders that help make the tax code more neutral.

An important provision that is missing is bonus depreciation. Bonus depreciation allows businesses to immediately deduct half their investment in equipment and software. This tax provision is an important step towards full expensing. Permanently extending this provision would boost GDP by over 1 percent, wages by 1 percent and create over 200,000 jobs.

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The Committee on Ways and Means, more commonly referred to as the House Ways and Means Committee, is one of 29 U.S. House of Representative committees and is the chief tax-writing committee in the U.S.

The House Ways and Means Committee has jurisdiction over all bills relating to taxes and other revenue generation, as well as spending programs like Social Security, Medicare, and unemployment insurance, among others.

A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.

An S corporation is a business entity which elects to pass business income and losses through to its shareholders. The shareholders are then responsible for paying individual income taxes on this income. Unlike subchapter C corporations, an S corporation (S corp) is not subject to the corporate income tax (CIT).