Tax

Deadline Looms for ‘Tax Extenders’ Package

Lawmakers in Congress have until year-end to resolve issues including the "Cadillac" tax provision of Obamacare.
Matthew HellerDecember 7, 2015

The “Cadillac” tax provision of the Affordable Care Act and tax breaks for low-income working families are among the issues in a broad “tax extenders” bill that lawmakers in Congress are working to resolve by the end of the year.

The bill would makes expired and expiring tax breaks permanent, but The Hill reports that, if a deal can’t be reached soon, lawmakers will likely end up just renewing the expired provisions for one or two years without making any permanent.

On the Cadillac tax, lawmakers from both parties are interested in including language to repeal or delay the levy on high-cost insurance plans. The Senate on Thursday passed an amendment to repeal the tax by a vote of 90-10, but the amendment was included in a bill that will be vetoed because it would repeal Obamacare.

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The Cadillac tax is slated to take effect and, according to the Congressional Budget Office, a repeal would cost about $93 billion in lost revenue.

A key priority for Democrats, The Hill said, is making the stimulus-law expansions of the Earned Income Tax Credit and the Child Tax Credit permanent. Key provisions of the EITC and the CTC are set to expire at the end of 2017.

Republicans are concerned about improper payments of the EITC and CTC and want to make changes to the programs that would reduce fraud, but Democrats are particularly opposed to measures that would involve requiring the recipients of the credits to provide their social security numbers.

Other contentious issues include the size of the tax extenders deal, which could cost upwards of $700 to $800 billion over a decade, and its duration.

Congress is considering making some expired breaks permanent, extending some for five years, and extending the rest for two years. “Exactly which provisions end up in which bucket appears to be somewhat settled but may not be completely final,” The Hill noted.