Three hundred companies this week joined in a letter urging the U.S. Senate to get serious about tax incentives legislation, because the consequences of inaction are serious. Excerpt:
Important tax provisions, including the R&D tax credit and the deduction for state and local sales taxes, have already expired. Others, including critical renewable energy incentives, the Subpart F active financial services and look-through rules, the New Markets Tax Credit, and the incentive for domestic film production, expire at the end of this year. Large tax increases would fall on American companies and American workers if the expired and expiring provisions are not extended.
Failure by Congress to move quickly to extend these important provisions will bring investment in renewable energy and energy efficiency projects to a standstill, make it more difficult for U.S. companies to invest in critical R&D projects in this country, reduce private sector investment in business and economic development projects in distressed areas, and force many U.S.-based financial institutions to suffer a massive tax increase at a time when they can least afford it.
Many political disputes, mostly about revenue offsets but also about new provisions — a $1.6 billion tax break for trial lawyers, for example — led to the failure of a cloture vote on H.R. 6049, the Renewable Energy and Job Creation Act of 2008, i.e., the tax extenders bill. The vote was 50-44, so that’s quite a distance to overcome before passage. This Congress Daily story covers the stickiests of the sticking points, still ending with an expression of optimism from the NAM’s Monica McGuire:
While the bill was currently in “political limbo,” recent movement demonstrates that lawmakers are concerned about the expiring provisions, said Monica McGuire, executive secretary of the R&D Credit Coalition. “I’m actually optimistic because there was a cloture vote today. In January, February, March, April, there wasn’t any talk about tax extenders. That raised my blood pressure,” she said.
- Dow Jones, “US Companies Call for Passage of Tax Extenders Legislation“
- Detroit News: “GM, Ford urge Congress to extend R&D tax credit“
- San Jose Mercury News: “Extension of tax credits for renewables, R&D fails in Senate“
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