Tax Credits Blog

Tax Credit Extenders Predicted!

From the Eastern Iowa Gazette:

Republican Senator Predicts Extensions on Tax Credits

Tax credits critical to wind energy development, college students and veterans seeking to re-enter the workforce likely will be extended, but not before the end of the year, according to Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee.

That’s despite a call from Iowa 1st District Democratic Rep. Bruce Braley for Congress to approve the Student Tuition Tax Deduction, the Work Opportunity Tax Credit for Returning Heroes and Wounded Warriors, and the Wind Energy Production Tax Credit before adjourning for the Christmas holiday.

“Congress should be working every day to create jobs and grow the economy, not hurt it, Braley said Dec. 11. “Congress should act immediately to renew these tax cuts before they expire.”

There won’t be any extension before Christmas, Grassley predicted, but not because of political opposition to the credits. Based on past performance, he said Wednesday, Congress will come back after the New Year and approve four dozen or more tax credits.

“There are a lot of economic interests” represented in the tax credits, he explained. Those interest groups collectively “put a lot of pressure on Congress to re-institute the credits.”

The delay, Grassley said, can be attributed to the ongoing discussion about “massive tax reform.”

If congressional leaders – in this case Finance Committee Chairman Max Baucus, a Montana Democrat, starts talking about extending the credits “it looks like you’ve given up on tax reform,” Grassley said, adding “which isn’t going to happen before Christmas.”

“They don’t want to poison tax reform next year,” he said

In making the case for extending tax credits, Braley said last year more than 18,700 Iowans claimed the tuition relief tax deduction.

The veteran work opportunity tax credits provide anywhere between $2,400 and $9,600 to businesses who hire veterans, he added.

Braley said MidAmerican Energy’s $1.9 billion investment in wind energy announced earlier this year probably would not have happened without the wind energy production tax credit. That investment will create jobs, generate $3 million a year in landowner payments as well as $360 million in additional property tax revenues over the next 30 years in those counties where wind turbines will be built, a company spokesperson said.

Also this week, 2nd District Democratic Rep. Dave Loebsack called on Congress to remain in session to pass a farm bill.

“I don’t want to be accused of being the Grinch who wants to steal Christmas, but passing a farm bill is too important for the House to pack up and go home early for the holidays,” Loebsack said.

However, House leaders said Tuesday that Congress won’t vote on a final deal this year. The soonest action will come will be mid-January when Congress returns from a holiday recess.

Democratic Sen. Tom Harkin, a member of the conference committee negotiating a farm bill compromise, said h continues to “hold hope.”

“There is no final agreement yet, though conferees are making good progress,” he said.

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