House bill locks in charity tax breaks

  • Rep. Peter Roskam of Wheaton walks down the steps of the U.S. Capitol. "This is where there's an incredible amount of common ground," Roskam said as the House passed charity tax breaks.

    Rep. Peter Roskam of Wheaton walks down the steps of the U.S. Capitol. "This is where there's an incredible amount of common ground," Roskam said as the House passed charity tax breaks. Daily Herald file photo

 
Bloomberg News
Updated 2/13/2015 3:14 PM

The House of Representatives voted to revive three U.S. tax breaks that encourage charitable giving in a bipartisan challenge to President Barack Obama's threat to veto the measure.

The 279-137 vote on Thursday exceeds the two-thirds threshold needed to override a presidential veto. The bill would extend the benefits indefinitely, saving taxpayers an estimated $14.3 billion over the next decade, according to the nonpartisan Joint Committee on Taxation.

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"This is where there's an incredible amount of common ground," said Representative Peter Roskam, an Illinois Republican.

The dispute over the charity tax bill is the first legislative fight this year over how to handle dozens of expired breaks and how to move ahead on lawmakers' shared goal of revamping the U.S. tax code.

The biggest provision in the bill passed Thursday would let people make direct contributions from individual retirement accounts to charities. Those donations could satisfy required minimum distributions from the accounts for people older than age 70 1/2 and let them avoid taking the money as income.

The other breaks would make it easier for people to donate land-development rights and would relax limits on donations of food inventory.

Obama threatened to veto the measure because it lacks budgetary offsets and because it doesn't address other expired or expiring tax breaks.

Working Families

"House Republicans are making clear their priorities by rushing to make these tax cuts permanent without offsets when key tax credit improvements benefiting 16 million working families with children are scheduled to expire," the White House said in a statement, referring to tax credit expansions set to lapse at the end of 2017.

                                                                                                                                                                                                                       
 

Republicans are trying to address dozens of tax breaks that expired at the end of 2014.

They are picking a few breaks to extend permanently, starting with ones that have bipartisan support. They contend that it's better to extend these measures indefinitely now than wait to enact a retroactive extension at the end of the year, as Congress has typically done.

"We should be leading," said Representative Paul Ryan, a Wisconsin Republican and chairman of the House Ways and Means Committee. "We should be setting the tone. We should be setting the tempo."

The House is scheduled to vote Friday on extensions of small business breaks. Ryan's committee Thursday approved removing the expiration dates from the state sales tax deduction and the research tax credit for businesses.

Ryan said the tax credit extensions sought by the White House were designed to be temporary when they were created in the 2009 economic stimulus law.

House Democrats oppose Ryan's approach.

                                                                                                                                                                                                                       
 

"If you're going to have tax reform, you can't take these issues off the table one at a time and leave the tough stuff to some later point," said Representative Jim McDermott, a Washington Democrat.

Senate Republicans, who control the chamber, haven't settled on a strategy for addressing the expired tax breaks.

Republican senators Pat Toomey of Pennsylvania and Mike Crapo of Idaho both said they supported the House approach.

"My own preference is to get done what we can," Toomey said.

John Cornyn of Texas, the second-ranking Senate Republican, said party members' desire to allow amendments on the Senate floor complicated plans.

"I think looking at some of these that make sense and passing them on a permanent basis makes good sense to me," he said in a brief interview this week. "I don't think there's a consensus yet."

The bill is H.R. 644.

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