The Republican (Mass.), Dec. 18:
With a recent set of prudent moves on taxation, Congress has set the stage for genuine tax reform next year. Trouble is, next year happens to be an election year, when big things seldom get done in Washington.
Still, it’s good to see the set of realistic moves on taxes approved with bipartisan support. For years now, Congress has had the nasty habit of using some none-toosubtle budget gimmickry to paint a picture that was rosier than reality.
Here was the drill: Lawmakers would create a tax break for something they wanted to promote – a specific kind of business, say – but would write the break into law only temporarily. That way, since the law would technically be off the books a few years down the line, it wouldn’t be counted for budgeting purposes.
It’s a little game that has been favored by members of both political parties. And while it won’t end completely, the latest deal will make permanent some of the tax policies that had been renewed year to year.
Not only is this realistic, it also allows businesses and individuals to plan for the future. Since breaks that are built to expire are sometimes not renewed in time, some actually do, at least temporarily, expire. Consequently, those planning for the next year and the one after that have got to act as though what’s here today may not be around tomorrow.
A couple of examples: A tax credit for business research and development that had expired at the end of last year was reinstated and made permanent. So too were faster write-offs for capital equipment, which had also expired at the end of 2014.
But it wasn’t just commerce that benefited. Tax credits for children, low-income families and college students that had been set to expire at the end of 2017 were also made permanent.
Along the way, lawmakers also made a few moves that are anything but ever-lasting.
Because, well, change comes slow on Capitol Hill. One example: The unpopular excise tax on medical devices that is a part of the Patient Protection and Affordable Care Act will be suspended for 2016 and 2017.
Watch for that one to come up again during broader talks next year.
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