U.S. Senate tax chief looks to tweak code, no reform yet

Reuters News
Posted: Mar 04, 2014 5:11 PM

By Patrick Temple-West

WASHINGTON (Reuters) - The U.S. Senate's tax-writing committee will begin work as soon as April on restoring a small package of tax breaks and not try to overhaul the tax code, the committee's new chairman said on Tuesday.

Senator Ron Wyden, an Oregon Democrat who took over the Senate Finance Committee last month, said tax reform was nearly impossible in the face of a busy political year culminating in congressional elections in November.

Instead Congress must focus on the small set of tax breaks for now, he said.

About 50 U.S. tax code provisions expired on December 31. Known collectively as "tax extenders," they include business tax breaks such as the research-and-development credit and items for individuals, such as a deduction to teachers for their school supply costs. Typically, Congress extends most of them year after year.

Wyden did not specify which of these tax breaks could be eliminated in a bill this year. He said some energy sector tax extenders should be examined to find cost savings.

Congress last passed tax extenders in January 2013 for about $64 billion, including about $18.1 billion in energy tax breaks. The bill included millions of dollars in tax breaks for the rum industry and owners of NASCAR auto racing tracks, among others.

Wyden, a long-time crusader for comprehensive tax reform, blasted Washington lobbyists for protecting tax breaks and impeding reform.

"The tax code is a rotten carcass that the special interests feast on," Wyden said.

The Finance Committee's work on a drafting the tax extenders bill, which could begin in April, will be "a springboard to broader reform," Wyden said.

Wyden spoke on the day the Obama administration proposed more than 100 tax changes in its fiscal 2015 budget. The budget called for making a handful of tax extenders permanent, including the R&D credit.

Wyden's predecessor as committee chairman was Max Baucus, now U.S. ambassador to China.

(Reporting by Patrick Temple-West; Editing by Howard Goller and David Gregorio)