Senate votes to open debate on bill to renew expired tax breaks that would add $85B to deficit
WASHINGTON - A bill to renew a package of more than 50 expired tax breaks cleared its first hurdle in the Senate Tuesday.
Other hurdles remain, however.
The Senate voted 96 to 3 to open debate on the bill, which has strong backing from the business community but would add about $85 billion to the budget deficit.
Almost every year, Congress routinely renews the tax breaks. This year, though, they were allowed to expire at the start of the year. The Senate bill would extend the tax breaks through 2015.
"Our constituents are depending on us to extend these provisions," said Senate Majority Leader Harry Reid, D-Nev. "We will not pull the plug before our nation's recovery is complete. By passing this tax extenders package we will build our nation's economy more quickly."
The tax breaks enjoy broad bipartisan support. But some Republican senators want the opportunity to change the package, and it's not clear whether Reid will allow amendments.
Republican amendments include making some of the tax cuts permanent while adding others, including the repeal of a medical device tax that helps fund President Barack Obama's health law. Republican senators may be forced to choose between blocking a bill that provides popular tax breaks and accepting it unchanged.
"Americans deserve tax certainty, not more short-term measures," said Sen. John Thune, R-S.D.
Thune said he wants to offer several amendments, including a permanent ban on state and local Internet access taxes. A temporary moratorium on such taxes is due to expire Nov. 1.
The package pairs broad tax breaks that benefit millions with narrow ones that don't.
Among the biggest breaks for businesses: A tax credit for research and development, an exemption that allows financial companies to shield foreign profits from being taxed by the U.S., and several provisions that allow businesses to write off capital investments more quickly. There is also a generous tax credit for using wind farms and other renewable energy sources to produce electricity.
The biggest tax break for individuals allows people who live in states without an income tax to deduct state and local sales taxes on their federal returns. Another protects struggling homeowners who get their mortgages reduced from paying income taxes on the amount of debt that was forgiven.
Other more narrow provisions include tax breaks for film and theatre producers, NASCAR race track owners, manufacturers of electric motorcycles and teachers who spend their own money on classroom supplies.
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