Thursday, May 29, 2014

House GOP Backs Tax Breaks That Add $300 Billion To Deficit

Michael McAuliff, HuffPost, Posted: 05/29/2014 5:03 pm EDT Updated: 1 hour ago

WASHINGTON -- The House Ways and Means Committee pushed ahead a set of tax breaks Thursday that would add another $304 billion to the deficit over 10 years, on top of $310 billion in loopholes it voted for last month.

If all the measures were to become law, they would wipe out the deficit savings Congress passed less than two years ago in the deal that headed off the so-called fiscal cliff. In that deal, Bush-era tax cuts were allowed to expire only on income above $400,000, returning about $600 billion to the treasury over 10 years.

Many of the loopholes that the tax-writing committee voted to extend Thursday are popular, including breaks for charitable deductions. The biggest change made permanent one of the tax cuts used recently for economic stimulus, called bonus depreciation, which allows companies that would normally have to write off new capital investments over many years to get 50 percent of the break right away.

Bonus depreciation has been used in the last two recessions to convince companies to speed up investments to spur the economy. But making the cut permanent -- as well as including things like the planting of fruit vines and trees as eligible investments -- would add $287 billion to the deficit over a decade, according to the Joint Committee on Taxation.

(More here.)

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