Why Congress May Just 'Let It Go' …Until Next Year

Congress might really be home for the holidays. Finance Committee Chairman Ron Wyden told reporters on Friday that the Senate won't amend the House-approved bill to revive over 50 expired tax breaks for 2014 only.

An up-or-down Senate vote could be held within days. Lawmakers must still sort out what they'll do about a spending bill—funding for most of the government ends next Thursday. But with so much temporary legislation that must some be addressed in 2015, Congress will have one doozy of a hangover when it returns in January—one that could last all year.

The National Taxpayer Advocate Service will end up serving less with less. The government might not shut down next week, but National Taxpayer Advocate Nina Olson expects a five percent TAS budget cut, given the cut to IRS funding overall. The budget cuts will also hit regular customer service. IRS could answer only three out of every five phone calls during the 2013 filing season and taxpayers were on hold for an average of 17 minutes.

It's going to be worse in 2015: The IRS projects it will answer only 53 percent of phone calls, and the average wait will be 34 minutes. But budget cuts mean fewer staff, so Olson predicts “the IRS will not be able to hit 53 percent on the phone.”

Would the ABLE Act be able to do enough? TPC's Howard Gleckman says no. The House-passed bill would create tax-favored savings vehicles for people with disabilities, but does little for those without family resources to contribute to the accounts, and applies only to those who became disabled before reaching age 26. Older adults with late-in-life diseases such as dementia, heart failure, and severe arthritis would be ineligible.

Gleckman warns, “Congress cannot respond to the enormous financial challenges of caring for those who need long-term supports and services with small, patch-work solutions like the ABLE Act. Given its limitations, ABLE may turn out to be more tax shelter than serious solution.”

The House Ways & Means Committee has picked new Subcommittee Chairs for the new session. Washington State's David Reichert will head  Select Revenue Measures, Peter Roskam of Illinois will chair Oversight, Louisiana's Charles Boustany Jr., will chair Human Resources, Trade will be chaired by Ohio's Patrick Tiberi. Texas' Kevin Brady, who lost the Way & Means Chairmanship to Paul Ryan, will head the Subcommittee on Health.

“If you want something done right, do it yourself.” Michigan state legislators are considering a gas tax hike to help pay for state road repairs and Governor Rick Snyder hopes it will pass before December 18. But Muskegon County bets any state funding would be too little, too late. Its county commissioners will ask residents to vote for a new 1.5-mill tax for road surface repair on February 24.

“It would be $6.25-a-month on a $100,000 home,” says Ken Hulka, managing director of the  County Road Commission. A public opinion firm found more resident support the tax than oppose it. With gas prices likely to fall further, they might be on to something.

'Tis the season for holiday parties… and tax policy events! TPC's Len Burman delivers  a lecture on taxes and inequality in a changing economy tonight at the German Historical Institute. On Tuesday, TPC's Tracy Gordon moderates a panel discussion on state and local pension reform featuring Jean-Pierre Aubry from the Center for Retirement Research at Boston College, TPC's Bill Gale, and the Urban Institute's Rich Johnson. Register for the webinar here.

On Thursday,  you'll want to find out whether US corporations are really over-taxed. TPC and the Penn-Wharton Public Policy Initiative cohost the discussion moderated by CNN Money's Jeanne Sahadi. It features TPC's Eric Toder, Penn-Wharton's Jennifer Blouin and Michael Knoll, and James Mackie from Treasury's Office of Tax Analysis. You can register here.

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