- One to extend and expand various energy-related tax incentives, offset by tax increases. (Not to be confused with a major energy bill containing drilling provisions.)
- A Senate majority leader’s amendment, addressing the Alternative Minimum Tax, possibly including tax offsets; and
- An AMT/tax extenders bill that includes many beneficial provisions for manufacturers, partially offset with tax increases.
The Senate has tried several times this year without success to pass legislation to extend the expiring tax provisions (e.g. the R&D tax credit). The efforts fell short because politically unpalatable permanent tax increases were included in the legislation to “pay for” extensions of the expired or expiring tax provisions.
The first and third amendments represent an agreement worked out with Democratic and Republican leaders and the top Finance Committee members, so we expect them to gain the 60 votes needed to prevent a filibuster, even with tax increases included.
We’re watching the third amendment especially, the bipartisan legislation to extend expiring or expired individual and business tax provisions. Among other things, this amendment contains the NAM’s primary tax objectives for the year:
- A seamless extension of a strengthened R&D credit;
- An extension of deferral of U.S. tax on active business global financing income
- An extension of the look-through rules for payments between related foreign corporations.
The total cost of the package is estimated at $125 billion, $25 billion of which is offset by a changing the tax treatment of the offshore income of hedge fund managers.
Even with plans for action getting clearer, we’ll refrain from making predictions about what Congress will ultimately produce. There may be moves in the House to amend the Senate language; the Blue Dog Democrats are pushing for offsets for all the tax relief provisions.
CQ Politics, “Senate Could Start Voting on Tax Package Thursday”
RollCall, “Tax-Extender Bill Held Up Again”