Congress to Consider Expiring Tax/Spending Provisions
Posted by admin on 05/25/2010
The House and Senate are expected to consider a package of provisions extending expiring tax and spending measures this week. The total cost of the “grab-bag” could exceed $200 billion, and lawmakers will surely scrutinize the package and determine how to raise offsetting revenue so that the bill does not add to the deficit. For our purposes, ManufactureThis highlights a handful of provisions that will both impact American manufacturers and their workers, including a study by the Department of Commerce “on job losses in New England, Mid-Atlantic and Midwest states over the past 20 years,” with an emphasis on the role that “off-shoring of manufacturing has played in job losses” and “recommendations on how to attract industries and jobs to the regions.” Summaries courtesy of the House Ways & Means Committee:
- R&D credit. The bill would reinstate for one year (through 2010) the research credit. This proposal is estimated to cost $6.650 billion over 10 years.
- Extension of Emergency Unemployment Compensation (EUC) program. The Emergency Unemployment Compensation (EUC) program is scheduled to phase-out at the end of May 2010. This program provides (depending on a State’s unemployment rate) up to fifty-three (53) weeks of extended benefits. The bill would extend the EUC program through December 2010.
- Extension of Extended Benefits (EB) program. 100% Federal funding for the Extended Benefits (EB) program is scheduled to phase-out at the end of May 2010. This program provides up to an additional 13 to 20 weeks of benefits in certain States (i.e., 13 weeks for States at or above 6.5% unemployment and another 7 weeks for States at or above 8% unemployment). The bill would extend full funding for the EB program through December 2010.
- Extension of steel industry fuel tax credit. The bill would extend the placed-in-service date for the $2.83 per barrel-of-oil equivalent tax credit for steel industry fuel by one year (through 2010) and would allow facilities that qualify for the tax credit to receive this benefit for the first two years from the date that the facility is placed in service. This proposal is estimated to cost $44 million over 10 years.
- Extension of railroad track maintenance credit. The bill would extend for one year (through 2010) the railroad track maintenance credit. This proposal is estimated to cost $165 million over 10 years.
- CLOSING FOREIGN TAX LOOPHOLES. Summary. The bill includes a package of provisions developed jointly by the Treasury Department, the Committee on Ways and Means and the Senate Finance Committee to curtail abuses of the U.S. foreign tax credit system and other targeted abuses. This system is intended to ensure that U.S.-based multinational companies are not subject to double taxation. However, taxpayers have taken advantage of the U.S. foreign tax credit system to reduce the U.S. tax due on completely unrelated foreign income in a manner that has nothing to do with eliminating double taxation. The bill would eliminate $14.451 billion of foreign tax credit loopholes.
- Reporting requirements for funds from the American Recovery and Reinvestment Act. The bill requires any agency funding a program provided for in the American Recovery and Reinvestment Act (ARRA) of 2009 at a level of $2 billion and above make available on their website a description of the goals for the program, information on how the funding will be distributed, milestones for major phases of activities under the covered program, and performance measures being used by the agency. The bill also requires agencies to publish quarterly reports on ARRA programs, including information on progress towards goals, details on unobligated and unexpired balances, and whether the program has met milestones and performance standards. Civil penalties are authorized for recipients of recovery funds who do not report to the appropriate agency information on the use of such funds. This proposal is estimated to have no cost.
- Commerce Department study on job losses. The bill requires the Commerce Department to submit a report to Congress on job losses in New England, Mid-Atlantic and Midwest states over the past 20 years. The Commerce Department would study what role the off-shoring of manufacturing has played in job losses, and would be required to submit recommendations on how to attract industries and jobs to the regions. This proposal is estimated to have no cost.
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