Senate Finance Committee: “Extenders and Tax Reform: Seeking Long-Term Solutions”
In a session entitled “Extenders and Tax Reform: Seeking Long-Term Solutions,” members
of the Senate Finance committee held a hearing on January 31, 2012 to discuss the
expiration of the so called tax extenders, of which WOTC is one. The discussion focused
on the uncertainty surrounding these tax provisions – provisions that expire often
and therefore make tax planning for businesses an exercise in guesswork and risk management.
Committee chairman Max Baucus (D-Mont.) addressed the state of affairs in his official
hearing statement, wherein he noted:
Benjamin Franklin once said, “In this world, nothing can be said to be certain, except
death and taxes.
But today not even our taxes are certain. There are currently 132 expiring provisions
in the code. That number has more than tripled since 1998. These policies, commonly-known
as “tax extenders,” expire every year or every two years.
The lack of certainty about these tax incentives is bad for American families, it’s
bad for businesses looking to create jobs and it’s bad for our economy. It leaves
businesses unable to plan ahead and invest, because year-to-year incentives are ineffective.
Indeed, Mr. Baucus’ point seems to be that without certainty around these tax provisions,
including WOTC, employers are stymied in their efforts to execute sound growth plans
as they pertain to hiring, investment, and innovation as they can not accurately predict
the tax landscape, and cannot, therefore adequately control all the risks involved
therein, for both the short and long term. This has the effect of inhibiting economic
growth and job creation, rather than acting as an impetus and catalyst to economic
Says Mr. Baucus:
Each day that businesses do not know whether tax extenders will be in place this year
means less American manufacturing, less production and fewer jobs.
In the meantime, we need to pass these tax incentives to help business.
In his own statement, Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance
Committee echoes Mr. Baucus’ theme by stating:
If a provision is worthy of being in the tax code, then it generally should be made
Chairman Baucus and I agree, along with many of our colleagues, that the current tax
code demands comprehensive reform. In the meantime, before tax reform is accomplished,
Congress needs to decide what to do about the tax extender provisions that have expired.
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