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Financial Planning > Tax Planning > Tax Reform

Senate Passes Tax Extenders Bill

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The Senate passed by a 76-16 vote late Tuesday a package of tax extenders that the House approved in early December, H.R. 5771, the Tax Increase Prevention Act of 2014

Sen. Ron Wyden, D-Ore., said, however, that with the “stop-and-go” tax extender bill Congress “is turning in its tax homework eleven months late and expecting to earn full credit,” as the package–which applies only to 2014–will last two more weeks “before families and businesses will be thrown back into the dark about what taxes they owe.”

This tax bill “doesn’t have the shelf life of a carton of eggs,” Wyden said.

Senate Majority Leader Harry Reid, D-Nev., noted in a statement that the extenders “encourage our economy to create jobs and strengthen the middle class,” and ensures that “students receive tax credits for the cost of their college tuition and allows teachers to claim their expenses for the personal money they invest in their classrooms.”

The extenders bill also gives employers the ability to pay for their employees public transportation costs without “unfairly taxing them,” Reid said, and continues the state and local sales tax deduction and Mortgage Forgiveness Debt Relief Act.

But Wyden, chairman of the Senate Finance Committee, said on the Senate floor that while Congress can pass this $41 billion dollar bill, “it cannot change anything taxpayers did six, eight or ten months ago,” as “those decisions have already been made, and those actions have already been taken.”

The only “new effects of this legislation apply to the next two weeks,” Wyden said, not nearly enough time “for the important provisions in this package to catalyze growth among businesses or to support families in a meaningful way. It’s not enough time to put a dent in veterans’ unemployment, to start a clean energy project and hire new workers, or to help a student who’s on the fence about whether to enroll in college next semester.”

The two-week bill also drops the Health Coverage Tax Credit, “yanking away an economic lifeline that working Americans were counting on this April 15,” Wyden added.

Wyden’s bottom line: “Retroactive tax bills like the one before the Senate tonight may satisfy Congress, but they leave workers, families and businesses wanting. It’s time for Congress to do the hard work of tax reform.”

– Related on ThinkAdvisor: House Renews Tax Extenders Through End of 2014


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