Levin Floor Statement in Opposition to Unpaid-for, Permanent Tax Bills

Jun 12, 2014

WASHINGTON – Ways and Means Committee Ranking Member Sander Levin (D-MI) today made the following statement on the House floor in opposition to making permanent the unpaid-for S Corporation (H.R. 4453) and Section 179 (H.R. 4457) tax credits:

The tax extenders being considered today are important to small businesses and have long been supported by Democrats.

The first two bills impacting S corporations regard the gain on the sale or distribution of appreciated assets and how charitable contributions of an S corporation are taken into account by shareholders. Over the years we have modified these provisions and extended them on a bipartisan basis.

The section 179 expensing provision which we will consider second has been in the Tax Code since 1958. It was expanded, and nearly quadrupled, to a maximum expensing allowance to $100,000 on a temporary basis in 2003.

In 2008, as another recession took hold, that allowance was increased to $250,000.

And in 2010, we again expanded the provision – this time to $500,000 – as we continued action to spur the economic recovery. This level was in effect through 2013, and this bill before us would make these significant expansions permanent, unpaid-for.

When these expansions were first enacted in 2003, House Republicans noted that these expansions ‘reflected the need for an economic stimulus and growth package.’

Republicans want to talk about certainty. Well, this much is certain – the expanded Section 179 provision will be extended again. Our economy still needs it. And if Republicans had any interest in working on a bipartisan basis on comprehensive tax reform we could discuss how best to make a stimulus effort a long-term part of the tax code. The S corporation provisions will be extended.

But we are not here today to make law. The President has indicated he will veto the approach – permanent, unpaid-for tax cuts – taken in the Republican bills before us today. And, the Senate Finance Committee has approved on a bipartisan basis legislation to extend all tax extenders for two years.

The inability of the House Republican Majority to take action to help our recovery, bolster small businesses, and grow our economy has resulted in smoke and mirror votes like the ones before us today. They want to signal that they support small business, but their action is so inconsistent with their past positions that it is rendered hypocritical.

Chairman Camp put forward a comprehensive tax reform proposal and received accolades for making it revenue neutral. He included these extenders in his comprehensive tax reform proposal – each with its cost offset.

The measures in front of us today add up to $75 billion in deficit increases. When you add in the R&D credit that passed the House last month and the eight other provisions that have moved through Ways and Means, it adds up to $614 billion, unpaid-for and permanent.

And there are still more than 40 tax provisions left unaccounted for. When all is said and done, Republicans will be well on their way to increasing the deficit by $1 trillion. And we all know where it will lead – to future Republican demands to cut vital domestic priorities that have been on the chopping block for the GOP: funding for education, public health, transportation to name a few.

Chairman Ryan put forward a Budget Resolution which the Republican Majority passed through this House. That Budget that you all voted for stipulates that any change in tax law must be offset. These bills of course shred that principle.

And, the final hypocrisy is one that really hits home for 3 million unemployed Americans. The Republican Majority insists that unemployment insurance be paid for, but when it comes to tax cuts, they can simply be added to the deficit. The bill before us today is seven times more expensive than the cost of extending federal unemployment insurance for the remainder of the year – and I should note that we have already agreed to offset the cost of such an extension.

Democrats stand ready to extend these provisions for small businesses. We stand ready to act on all of the expired tax provisions, and we stand ready to act on comprehensive tax reform. And we certainly stand ready to extend unemployment insurance for 3 million job seeking Americans, paid for. But we won’t be silent in the face of Republican hypocrisy on display today. What they’re doing today is reckless and irresponsible.