Representatives from a wide range of industries are set to appear before a House panel Wednesday to convince members of Congress that their own pet tax breaks should be made permanent.
Nearly 20 witnesses will appear in three different panels before the Ways and Means tax subcommittee as it weighs the so-called “extenders,” an unusually ranging and thorough consideration for Capitol Hill. Extenders are several dozen temporary, narrowly-targeted tax breaks that lawmakers decided weren’t worth including in the major tax reform bill, or in a 2015 bill that made most other extenders permanent, ending a long-running cycle of extensions of the temporary breaks.
There will also be a fourth panel of expert witnesses.
The breaks expired at the end of 2016, and then were retroactively reinstated for that year as part of the budget deal signed by President Trump in February, at a cost of about $17 billion.
Kevin Brady, R-Texas, the Republican chairman of the Ways and Means Committee, has said that it no longer makes sense to proceed with temporary tax breaks for individual activities, now that the tax code has been overhauled. The beneficiaries of the tax cuts are supposed to make the case that the breaks should be made part of the permanent code at Wednesday’s hearings. Ones that don’t make the cut are at risk of expiring forever.
The breaks include tax cuts for activities as random as horse racing and Puerto Rican rum distilling, as well as several benefits for green energy.
Representatives of some of those industries will defend receiving specific tax cuts at Wednesday’s hearing. For example, one of the witnesses is the CEO of a company that makes electric motorcycles, which benefit from one extender. Another represents railroads, which would get a special break for track maintenance.
Some Republicans and conservative groups view the remaining extenders as corporate welfare and believe they should be allowed to expire.
The heads of two major free-market groups, Americans for Prosperity and Freedom Partners, wrote in a letter to the committee asking them to reject the extenders that “these carve outs were the products of a broken tax code riddled with the corrupting influence of corporate welfare and designed to allow Washington to pick winners and losers. They benefit the well-connected few at the expense of everyone else, they are unjust and unfair, and they underscore one of the major reasons why tax reform was so desperately needed in the first place.”
Yet each extender has members of Congress who will defend it, in part because a favored business might have a location in their district or state.
Brady said Tuesday that, in addition to Wednesday’s hearing allowing industry officials to make the case for their own tax breaks, there would be an opportunity for congressmen to advocate for individual extenders.
But for every tax break that members decide to keep and make permanent, Brady said, its defenders will have to propose what other tax advantage they’re willing to “relinquish” to help make up the revenue loss, or identify another potential revenue-raiser elsewhere in the tax code.
