Tue., 9:08 pm: Bill to renew tax breaks clears hurdle in Senate
WASHINGTON – A bill to renew more than 50 expired tax breaks for businesses and individuals cleared a key hurdle in the Senate today, giving hope to millions of taxpayers who would otherwise be hit with unwelcome tax increases next spring.
Other hurdles remain, however.
The Senate voted 96-3 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.
“Our constituents are depending on us to extend these provisions,” said Senate Majority Leader Harry Reid, D-Nev. “We will not pull the plug before our nation’s recovery is complete. By passing this tax extenders package we will build our nation’s economy more quickly.”
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.