Lawmakers involved in negotiations over tax extenders legislation have indicated they are no closer to striking a compromise.
The popular temporary tax provisions, which expired in 2017 or are set to expire at the end of this year, are among Congress’s top tax priorities this year, along with a handful of technical corrections to the Tax Cuts and Jobs Act (TCJA) and retirement incentives.
Democrats in the House of Representatives are willing to support an extenders bill, and even advanced legislation out of the Ways and Means Committee in June that would renew all of the expired and expiring provisions through 2020. However, they are seeking major concessions in exchange, such as expanding the Earned Income Tax Credit, the child tax credit and the child and dependent care tax credit, granting loans to financially troubled multiemployer pension plans and at least partially lifting the $10,000 cap on the state and local tax deduction enacted by the TCJA.
Republican tax writers have largely written this proposal off as a nonstarter, citing the high cost and lack of sufficient revenue offsets.
Congress is running out of time to find consensus on extenders and the other outstanding tax items. A spending package presents the last must-pass legislation for Congress this year and is perhaps the most viable vehicle for tax bills. Government funding is presently set to run out on Nov. 21, although another temporary extension until December is possible.
If Congress is unable to attach tax legislation to a spending bill, a stand-alone tax package remains a possibility. However, several lawmakers have conceded that the current environment on Capitol Hill is not the most conducive for significant, bipartisan compromise.
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