Today, Senate Democrats will offer Republicans one more chance to provide tax relief to American families and small businesses. The Senate Democratic “tax extenders” measure provides over $55 billion in tax breaks, while offsetting this cost in a fair and responsible manner. Below is a sample of the misinformation being used by the GOP to block this bill, and the corresponding facts.
RHETORIC: Short term tax extensions should not be paid for with permanent tax increases.
- REALITY:Democrats believe in offsetting spending when possible. This bill has two offsets. The first curtails a method by which certain individuals, predominantly hedge fund managers, defer the recognition of income though offshore tax havens and other tax loopholes. The second delays a rule that has yet to even be implemented. The 2004 rule, which the bill calls for delaying until 2019, gives multinational corporations more flexibility in accounting for their interest costs. [CQ Weekly, 5/26/08]
RHETORIC: The bill provides a new tax benefit just for trial lawyers.
- REALITY: The bill gives no special treatment to trial lawyers. The provision in question simply provides the same benefit to the legal profession that is available to other businesses, the ability to deduct costs as they are incurred. Specifically, the measure would allow attorneys in contingency fee cases to count expenses in the year they are incurred, not in the year of the award. [CQ Weekly, 5/26/08]
RHETORIC: The bill only extends provisions that expire at the end of 2007 until the end of 2008, setting up the need for another extenders bill next year.
- REALITY: In order to be fiscally responsible, some of the tax provisions are being extended for a year. However, the measure extends through 2009 the credit for wind energy projects, and would extend through 2011 the credit for producing electricity from other sources, including biomass and geothermal energy. It also extends the investment credit for solar energy property through 2016. [CQ Weekly, 5/26/08]
RHETORIC: The bill includes a tax earmark for New York City.
- REALITY: The bill implements a proposal included in the President’s FY 2009 Budget to provide the City of New York and the State of New York with tax credits for expenditures made for transportation infrastructure projects connecting with the New York Liberty Zone. [Office of Senator Max Baucus Press Release, 6/12/08]