Wednesday, May 1, 2013

Law makers pitching pet projects ahead of tax reform overhaul - ABLE Act

By Bernie Becker and Kevin Bogardus from The Hill:
Lawmakers in both parties are already touting their favorite pet projects for inclusion in tax reform.
Members say introducing a targeted proposal gives their issues extra attention and allows them to lay a marker before the real horse trading over a tax code overhaul begins.
Both Democrats and Republicans said that they checked in with senior tax-writers in their party before going public with their proposals, for fear of undermining House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Senate Finance Committee Chairman Max Baucus (D-Mont.).
Still, lawmakers acknowledge that their favored causes  — such as Rep. Jim Gerlach’s (R-Pa.) planned proposal on conservation easements — will have a tough time becoming law on their own.
“What ends up on the cutting room floor, so to speak, is uncertain at this point. But these individual bills are all important in and of themselves. You want to try and build a consensus around them,” Gerlach, a member of the Ways and Means panel, told The Hill. “And hopefully at the end of the day, it’s part of the final piece.”
House GOP leaders are considering a push to attach a measure expediting tax reform to an increase in the debt ceiling, something that will likely need to be done before October.
Camp sat down to discuss tax reform with the rank-and-file last week, and Baucus has been meeting regularly with Finance Committee members on the issue. Both lawmakers are facing their final 20 months as tax-writing chairmen.
K Street veterans said Camp, who is seeking as much wiggle room as possible on tax reform, is trying to limit the introduction of tax bills, and Ways and Means Committee Republicans have suggested the first revenue bill the House will pass this Congress is a comprehensive revamp of the code.
A GOP aide said Camp wants to go line by line through the tax code and start anew.
“People are going to have to make an argument for what goes back in,” the aide said. “And if it’s economically justified, then we’ll do it.”
As for Camp’s message to lawmakers seeking to introduce tax bills, the aide said: “The first question we ask is, ‘How does this fit into tax reform?’ And if you don’t have a good answer for that, you probably shouldn’t be introducing the bill.”
On the other side of the Capitol, Baucus has introduced a couple of tax measures, including one to help veterans, and recently he joined a Democratic proposal to extend and expand the eligibility for the Earned Income Tax Credit.
A Democratic aide said that Baucus “just doesn’t throw his name on any bill.” But, the staffer added, the chairman was “not going to draw any lines in the sand.”
“When it comes to comprehensive tax reform, we’re going to have to look at it in its entirety,” the Democratic aide told The Hill.
Still, both lawmakers and interest groups believe that narrowly introduced legislation can help them edge their way into the tax reform debate.
For instance, organizations like the Brewers Association — the craft beer brewers’ trade group — and the National Down Syndrome Society have pushed Ways and Means working groups on their priorities, according to comments filed with the committee.
The brewers group is pushing for a bill that would reduce the federal excise tax on small beer producers to be included in a larger tax reform vehicle, while the National Down Syndrome Society is going all out for the Achieving a Better Life Experience (ABLE) Act.
“It is really hard to pass tax legislation in this climate. So having a vehicle that ABLE can be attached to is a great way to move it forward. And that’s what congressional champions are telling us to do,” said Sara Hart Weir, the group’s vice president of advocacy and affiliate relations.
The stand-alone ABLE bill — introduced by Rep. Ander Crenshaw (R-Fla.) — is popular, with 139 co-sponsors in the House. But a big tax reform bill is likely the best ticket for the legislation, which would create tax-exempt accounts to help individuals with disabilities save for education, healthcare, housing and transportation.
“We see this as the driving vehicle to pass the ABLE Act,” Hart Weir said.
In the Capitol, House Rules Committee Chairman Pete Sessions (R-Texas) was among the members to file comments with the committee, advocating for a bill that would allow charitable donations to help upgrade fraternity and sorority houses.
Reps. Gerry Connolly (D-Va.), Jan Schakowsky (D-Ill.) and Terri Sewell (D-Ala.) also reached out to working groups in comments on issues as varied as the tax-exempt treatment of municipal bonds to a proposed tax credit to help start apprenticeship programs.
On the Ways and Means panel, Rep. Lloyd Doggett (D-Texas) has legislation aimed at reining in the use of tax havens and to make permanent an education tax credit started in the stimulus package. Rep. Diane Black (R-Tenn.) has also joined the fray with a bill to require more identification when claiming education tax credits.
“I’d be doing this whether or not the committee were considering overall code revision,” Doggett said. “I think there probably is more common view on the education issue between me and the majority, and there definitely isn’t a common perspective on international tax.”
Even organizations that aren’t pushing more targeted legislation understand why members and interest groups would want to get in the game.
The National Association of Wholesaler-Distributors (NAW), for instance, wants to protect an accounting method known as “last in, first out,” or LIFO, that allows companies to lower their tax bills by assuming they sell their newest inventory first.
The LIFO coalition, which the association runs, is not pushing specific legislation to protect the accounting method, though the group did file comments with the Ways and Means Committee. Still, Jade West, NAW’s senior vice president of government relations, said she understood why members would be attracted to more rifle-shot tax proposals.
“Get an oar in the water. Lay down your marker. Make sure your issue is heard,” West said.

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