Director of Federal Tax Policy
The House is scheduled to vote tomorrow on the first of an expected series of bills to make permanent many large “tax extenders” — tax breaks, mostly for corporations, that policymakers routinely extend a year at a time — without offsetting the cost. Tomorrow’s bill would make popular charitable-related tax provisions permanent, which many lawmakers support on policy grounds. But, as our paper explains, doing so now without offsetting the costs would open the door for making other, costlier extenders permanent. Making all of the extenders permanent would cost $473 billion over the next decade (see graph).
Ways and Means Committee Chairman Paul Ryan has made clear that House Republican leaders are simply “picking up where we left off last year,” when the House passed a series of permanent tax-extender bills, along with a bill to expand and permanently extend the “bonus depreciation” tax break, without offsetting any of the cost. The President and many House members opposed that effort, and the President has properly threatened to veto tomorrow’s bill to make permanent the charitable provisions that Ways and Means approved last week.
Making the extenders permanent without paying for them would: