Tax-Break Plan Costing $450 Billion Said to Be Near Completion

Nov. 25 (Bloomberg) — U.S. lawmakers are nearing an
agreement on extending tax breaks that would add about $450
billion to the budget deficit over the next decade, with an
announcement coming as soon as today, said a Democratic aide.

Any bipartisan agreement announced in Congress may not win
the support of the White House, making its fate uncertain.

The accord would revive and make permanent tax breaks for
corporate research and small-business investments that expired
at the end of 2013. It also would make permanent a break
allowing individuals to deduct state sales taxes, an issue
that’s important to Senate Majority Leader Harry Reid, a Nevada
Democrat.

The production tax credit for wind energy would be phased
out over several years, said the aide, who spoke on condition of
anonymity before the announcement.

A tax break for mass-transit commuters would also be
permanently extended as would a tax credit for college tuition,
the aide said. Those are items championed by Senator Charles
Schumer of New York, the third-ranking Senate Democrat.

Dozens of other tax breaks that expired at the end of 2013
would be extended through 2015.

After reports of the emerging agreement yesterday, the
Obama administration issued statements signaling that it opposed
a package that doesn’t extend expansions of the child tax credit
and earned income tax credit that lapse at the end of 2017.

“An extender package that makes permanent expiring
business provisions without addressing tax credits for working
families is the wrong approach, at the expense of middle class
families,” Treasury Secretary Jacob J. Lew said yesterday.
“Any deal on tax extenders must ensure that the economic
benefits are broadly shared.”

Congress returns on Dec. 1 to finish its post-election
session. The tax break package would be considered then.

To contact the reporter on this story:
Richard Rubin in Washington at
rrubin12@bloomberg.net

To contact the editors responsible for this story:
Jodi Schneider at
jschneider50@bloomberg.net
Mark McQuillan

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