House Ways and Means Committee Chairman Kevin Brady said Thursday morning that he’s finished with one of Washington’s ugliest traditions: the annual passage of legislation to extend a multitude of expiring temporary tax breaks that benefit a range of businesses and industries.
Those breaks, known as tax “extenders,” don’t make sense in the wake of the major overhaul of the tax code that Brady spearheaded and President Trump signed.
“Our old tax code is over,” the Texas lawmaker said at a tax conference in Washington. “And now, it makes zero sense to trudge on with old provisions that served a different purpose, in a different tax code, during a different time.”
Last week, Congress passed a retroactive extension of about $17 billion worth of extenders for 2017, as part of the major budget deal reached between Republicans and Democrats.
Now some beneficiaries and lawmakers want them re-upped for 2018 as well, and Brady is resisting. “2017 was pre-tax reform. 2018 is post-tax reform, so there’ll be a much tougher test” for targeted tax breaks, he said.
The tax cuts in question, which benefit industries like horse racing and rum production, are the remnants of a much larger package of extenders that were made permanent in a major deal in 2015. That bill included the most important extenders, the ones that the majority of lawmakers thought were worth making permanent.
The Ways and Means Committee will hold a hearing, Brady said at Thursday’s TCPI Annual Tax Policy and Practice Symposium, at which advocates of individual breaks will have to justify the provision’s existence and explain what they would give up, in terms of tax benefits, to have them made permanent. Ones that pass such a “thoughtful review process,” Brady said, will be slated to become permanent. The ones that don’t should be eliminated, he said.
