The leaders of the Senate Finance Committee announced late on July 31 that they would hold a markup on August 2 of a bill extending a number of tax breaks set to expire at the end of 2012. The bipartisan Family and Business Tax Cut Certainty Bill of 2012 would cost roughly $151.7 billion over 10 years and does not include nearly 25 percent of the provisions typically found in an extenders package.
The measure allows for a one-year patch for the alternative minimum tax (AMT) for the 2012 tax period, affecting 27-million taxpayers, that is estimated to cost $92 billion over 10 years. The bill also extends for two years, through 2013, the research tax credit at an estimated cost of $14.3 billion over 10 years. The package also extends for two years the deduction for state and local taxes and exceptions under Subpart F for active financing income. In addition, it temporarily extends the increase in the maximum amount and phase-out threshold under Code Sec. 179 .
No additional measures found their way into the package although it is expected that members will offer amendments during the markup. Sen. Charles E. Grassley, R-Iowa, a former committee chairman and ranking member, will likely push for inclusion of the production tax credit, which is considered vital to the wind energy industry. Notably missing from the package are tax incentives for GO Zones, refined coal, book and computer inventory charitable deductions and the plug-in conversion credit. Baucus suggested, however, that the bipartisan deal serves as an indicator that Congress can work together to make difficult decisions. “We’re facing serious challenges with the fiscal cliff at the end of the year, and this win shows we’re able to come together to tackle tough problems,” said Baucus.
Sen. Charles E. Schumer, D-N.Y., a member of the Senate Finance Committee, viewed the agreement on the package as a victory particularly for Democrats. “Getting the AMT patch included in this bipartisan deal is a major win. Republicans had been trying to hold AMT relief out as leverage for the lame-duck negotiations,” said Schumer. A full Senate vote on the extenders bill is expected sometime in September after lawmakers return from a five-week summer recess.
By Jeff Carlson, CCH News Staff
Summary of Family and Business Tax Cut Certainty Act of 2012
JCT Description of the Family and Business Tax Cut Certainty Act of 2012, JCX-67-12
JCT Estimated Revenue Effects of the Family and Business Tax Cut Certainty Act of 2012, JCX-68-12