Congress letting 55 tax breaks expire at year's end | Fox News

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TA X E S

Published December 30, 2013 Associated Press

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In an almost annual ritual, Congress is letting a package of 55 popular tax breaks expire at the e uncertainty -- once again -- for millions of individuals and businesses. Lawmakers let these tax breaks lapse almost every year, even though they save businesses and dollars. And almost every year, Congress eventually renews them, retroactively, so taxpayers ca they file their tax returns. No harm, no foul, right? After all, taxpayers filing returns in the spring won't be hurt because the for 2013. Taxpayers won't be hit until 2015, when they file tax returns for next year. Not so far. Trade groups and tax experts complain that Congress is making it impossible for busi plan for the future. What if lawmakers don't renew the tax break you depend on? Or what if they longer eligible? "It's a totally ridiculous way to run our tax system," said Rachelle Bernstein, vice president and ta Retail Federation. "It's impossible to plan when every year this happens, but yet business has go Some of the tax breaks are big, including billions in credits for companies that invest in research generous exemptions for financial institutions doing business overseas, and several breaks that capital investments faster. Others are more obscure, the benefits targeted to film producers, race track owners, makers of e teachers who buy classroom supplies with their own money. There are tax rebates to Puerto Rico and the Virgin Islands from a tax on rum imported into the U for expenses related to railroad track maintenance. A deduction for state and local sales taxes benefits people who live in the nine states without sta tax breaks benefit college students and commuters who use public transportation.

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A series of tax breaks promote renewable energy, including a credit for power companies that pr windmills. The annual practice of letting these tax breaks expire is a symptom a divided, dysfunctional Con pass routine legislation, said Rep. John Lewis of Georgia, a senior Democrat on the tax-writing H Committee. "It's not fair, it's very hard, it's very difficult for a business person, a company, to plan, not just for long-term planning," Lewis said. "It's shameful." With Congress on vacation until January, there is no chance the tax breaks will be renewed befo is plenty of precedent for Congress to let them expire for months without addressing them. Most the end of 2011, and Congress didn't renew them for the entire year, waiting until New Year's Da taxpayers to claim them on their 2012 returns. But Congress only renewed the package though the end of 2013. Why such a short extension? Washington accounting is partly to blame. The two-year extension January cost $76 billion in reduced revenue for the government, according to the nonpartisan Jo Making those tax breaks permanent could add $400 billion or more to the deficit over the next de With budget deficits already high, many in Congress are reluctant to vote for a bill that would add do it slowly, one or two years at time. "More cynically, some people say, if you just put it in for a year or two, then that keeps the lobbyi and wine-and-dine the congressmen to get it extended again, and maybe make some campaign Luscombe, principal tax analyst for CCH, a consulting firm based in Riverwoods, Ill. This year, the package of tax breaks has been caught up in a debate about overhauling the entir tax writers in Congress -- House Ways and Means Committee Chairman Dave Camp, R-Mich., a Committee Chairman Max Baucus, D-Mont. -- have been pushing to simplify the tax code by red using the additional revenue to lower overall tax rates. But their efforts have yet to bear fruit, leaving both tax reform and the package of temporary brea how businesses should prepare, given the uncertainty, Camp said: "They need to get on board w they need to do." Further complicating the issue, President Barack Obama has nominated Baucus to become U.S meaning he will soon leave the Senate, if he is confirmed by his colleagues.

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As the Senate wound down its 2013 session, Democratic leaders made a late push to extend ma asking Republican colleagues to pass a package on the floor of the Senate without debate or am objected, saying it wasn't a serious offer, and the effort failed. So should taxpayers count on these breaks as they plan their budgets for 2014? "The best thing I would say is, budget accordingly," said Jackie Perlman, principle tax research a at H&R Block. "As the saying goes, hope for the best but plan for the worst. Then if you get it, gr don't count on it."

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Congress letting 55 tax breaks expire at year's end | Fox News

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