House passes two tax bills

Posted By on Dec 16, 2014 | 0 comments

On December 3, the House of Representatives overwhelmingly passed H.R. 647, the “Achieving a Better Life Experience (ABLE) Act of 2014,” by a vote of 404 to 17. The ABLE Act provides for a new type of tax-advantaged savings program to help in meeting the financial needs of disabled individuals as well as families raising children with disabilities. The ABLE Act was subsequently incorporated into the engrossed extender bill, H.R.5771, the “Tax Increase Prevention Act (TIPA) of 2014,” that was passed the same day.

The House of Representatives passed H.R.5771, the “Tax Increase Prevention Act of 2014” (TIPA), a $41.6 billion bill which would generally extend for one year through the end of 2014 over fifty tax relief provisions that expired at the end of 2013. It is expected that the Senate will pass and the President will sign the extender bill.

Although the House-passed extender package, H.R.5771, the “Tax Increase Prevention Act of 2014,” provides for a multitude of individual and business extenders and a new type of tax-advantaged savings program for individuals with disabilities, it also contains other tax provisions, including ones with revenue offsets.

On December 11, a separate bill, H.R. 5806, that would renew only three charitable breaks with no expiration date fell short of the necessary votes to pass. Charitable groups have been pressing Congress to back the breaks, contending that renewing them periodically doesn’t give taxpayers enough time to plan their donations. These extender bills usually pass at the end of the year when they retroactively apply and expire within days to at most a few weeks. Passing bills at the end of the year does not encourage taxpayers or businesses to conduct any activity if they expire in such a short amount of time. This is the reason that removing expiration dates is promoted; however, the argument for why they expire is to provide Congress with a means of squeezing in other legislation bundled in ‘urgent’ bills needed to keep the government running.

The White House threatened to veto H.R. 5806 because the bill did not contain budgetary offsets and would set a precedent for extensions of other temporary policies. Some commentary highlights the fact that it would also set a precedent of not requiring annual emergency legislation for the primary purpose of slipping in earmarks or other nefarious legislation without much scrutiny. Politicians need the media and taxpayers to be watching the left hand while the right hand is out of sight. Magicians call this ‘sleight of hand’, which everyone knows is a way of manipulating things secretly. Politicians seem to prefer the term ‘extenders’.