The U.S. Senate voted today to pass a Democrat version of the 2012 tax cut bill. The House of Representatives introduced its own Republican version yesterday and will vote on it next week. While neither proposal addresses WOTC or the majority of other tax extenders, no one expects either version to become law. And so the tug of war continues.
We received the following analysis and advice tonight from Paul Suplizio, President of the WOTC Coalition. It is reprinted here with permission.
From: Paul Suplizio firstname.lastname@example.org
Sent: Wednesday, July 25, 2012 11:30 PM
Subject: Senate Passes Obama Tax Proposals, House Republicans Write Tax Bill Without Extenders
July 25, 2012
By agreement of the two Leaders waiving filibuster, the Senate today voted 51-48 to pass S.3412, the “Middle Class Tax Cut Act of 2012” introduced by Majority Leader Harry Reid, containing President Obama’s tax plan extending the Bush tax cuts for all but high earners, increasing the capital gains rate to 20% and eliminating the 15% dividend preference.
Vice-President Joe Biden presided over the Senate, prepared to vote in case of a tie.
In prior action, the Senate defeated by 54-45 the Republican alternative, S. 3413, the “Tax Hike Prevention Act,” introduced by Senator Orrin Hatch. The Republican alternative would extend the Bush tax cuts for a year, increase AMT relief, and continue full expensing.
WOTC and other tax extenders were not included in the bill. Texts of S.3412 and S.3413 are at www.thomas.gov.
Yesterday House Republicans introduced their tax bill, H.R. 8, the “Job Protection and Recession Prevention Act of 2012” to be voted on next week.
H.R. 8 was introduced by Ways and Means Chairman Dave Camp and co-sponsored by all Ways and Means Republicans, including WOTC co-sponsors Congressman Aaron Schock and Congresswoman Lynn Jenkins. A formal mark-up wasn’t held.
WOTC and other extenders aren’t included in H.R. 8. The bill extends the Bush tax cuts for a year, continues full expensing, expands Coverdell Education Savings Accounts and the Adoption Credit, but reduces the Child Credit and Earned Income Tax Credit and terminates the American Opportunity Credit.
Text of H.R. 8 is not yet available, but a full “Technical Explanation of H.R. 8” (JCX-63-12) and “Estimated Revenue Effects of H.R. 8” (JCX-64-12) are at the Joint Committee on Taxation web site, www.jct.gov.
Democrats will be allowed a vote on their alternative plan when H.R. 8 goes to the floor. Yesterday, Democratic Caucus Chairman John Larsen said tax extenders were one of several possibilities for a Democratic bill, but as in the Senate, the core of any Democratic alternative will be the President’s proposals on the Bush tax cuts and restoring cuts in the Child Credit, Earned Income Tax Credit, and American Opportunity Tax Credit.
The vote in the House on H.R. 8 is expected to be the reverse of action taken by the Senate—Republicans will first vote down the Democratic alternative, then pass a one-year extension of the Bush tax cuts.
The Senate still has a chance to bring up an extenders bill next week, or Welfare Reauthorization which must be passed by September 30th and could carry a WOTC extension. We are interested also in the Farm Bill which has a September 30th deadline and is WOTC-germane because it reauthorizes Food Stamps and the Food Stamp Work Program and carries tax provisions.
Nonetheless, odds are Congress will leave on August 3rd without action, returning home to campaign and face constituents—perfect opportunity to get acquainted and talk WOTC with “the undecideds.”
We will continue pressing all options through September so WOTC won’t be shelved till after the election—HR. 8, Welfare Reauthorization, and the Continuing Resolution are possible vehicles.
Crises wait upon no man, so H.R. 8 could become a vehicle for compromise if the economy continues to stagger and financial crisis deepens in Europe. Fed Chairman Bernanke and Treasury Secretary Geithner have been warning Congress a European crisis will spill over to the U.S. financial system. The prospect of another financial shock is scary to a lot of congressmen—and this Congress has proven it needs a dire situation to act. What was that saying about a crisis being something not to waste?
PAUL E. SUPLIZIO