A preliminary draft of provisions for House legislation extending temporary tax breaks would renew the expired breaks through 2019 while moving up the expiration of the estate tax exemption.
The draft document would let the estate tax exemption that went into effect after passage of the 2017 Republican tax law expires at the end of 2023 instead of at the end of 2025. The 2017 law expanded the exemption to $11.18 million per person, from $5.49 million.
The estate tax change would bring the government $25 billion, which would be enough to pay for the temporary tax breaks, according to the document. Some Ways and Means Committee Democrats, like Rep. Lloyd Doggett (D-Texas), want the extenders to be paid for.
The package would also expand the earned income tax credit for childless workers and the child and dependent care tax credit for two years. It also includes disaster tax relief for disasters that happened since the beginning of 2018 and up to 30 days after enactment of the bill.
A bill resembling the draft would be considered dead on arrival in the Senate, where Republicans are unlikely to entertain any change in the estate tax exemption.
On the Senate side, U.S. Senate Finance Committee Chairman Chuck Grassley of Iowa and Ranking Member Ron Wyden of Oregon formed several bipartisan task forces to examine temporary tax provisions that expired or will expire, between December 31, 2017, and December 31, 2019—a total of 42 provisions. In addition, they provided a background document on the tax extenders from the Joint Committee on Taxation (JTC).
The taskforces will be charged with examining tax policies within the following issue areas: workforce and community development, health, energy, business cost recovery, and a combined group consisting of individual, excise, and other temporary policies. They will be tasked with finding possible solutions that would provide long-term certainty in these areas. A separate taskforce will examine whether there is a core package of tax relief provisions that should be available when natural disasters strike.
In February, Grassley and Wyden introduced bipartisan legislation to restore the tax provisions that expired at the end of 2017 and 2018 through the balance of this year and provide disaster tax relief benefits to individuals and businesses affected by major disasters occurring in 2018. The House of Representatives is required under the Constitution to initiate all tax legislation.