Rum, race cars, windmills win Senate tax favor

Reuters News
Posted: Apr 03, 2014 2:18 PM

WASHINGTON (Reuters) - The U.S. Senate's tax committee approved a package of special-interest tax breaks on Thursday, including three measures that were left off the list two days ago in a brief bipartisan nod toward fiscal reform.

In a sign of business-as-usual on Capitol Hill, the Senate Finance Committee backed tax breaks for auto race tracks, wind energy, multinational corporations, Hollywood, school teachers, Puerto Rican rum producers, college tuition and more.

About 50 temporary tax breaks won a two-year extension from the panel in an $85-billion legislative package known as the "extenders," so named because they need to be renewed regularly. They will next go to the full Senate for consideration.

The tax-writing House of Representatives Ways and Means Committee is set to vote on its own extenders package next week.

Most of the extenders technically expired at the end of 2013. The measure just approved would renew them retroactively.

On Tuesday, Senate Finance Chairman Ron Wyden, a Democrat, and top committee Republican Orrin Hatch had unveiled a slimmed-down "extenders" package. At the time, Wyden said he was "determined this will be the last extenders bill on my watch."

At the committee meeting, Wyden reiterated that he wants to end the extenders process as part of a broad overhaul of the tax code. But he acknowledged tax that will not happen soon.

"Today, we've got to balance short-term needs with long-term goals," said Wyden, who just recently took over the committee.

The approved package includes a tax break used by big companies to avoid corporate income tax on capital transfers between offshore units, known as the look-through rule. Wyden had left this one out in his original bill, but it was put back.

Tax breaks for wind energy production and auto racing tracks were also added back to Wyden's legislation.

Tax breaks were also renewed for teacher supply costs, mortgage insurance costs, railroad track maintenance, bonus depreciation for businesses, and corporate research and development, among many others.

(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and David Gregorio)