Club for Growth opposes Senate tax extenders bill

The Club for Growth is warning senators against extending a slew of expired tax breaks that help both businesses and individuals.

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The powerful free-market group told lawmakers that it would use the vote on the Senate’s so-called tax extenders package in its yearly scorecard, deriding the more than 50 incentives as “mainly a hodge-podge of special interest earmarks.”

Majority Leader Harry Reid (D-Nev.) has said he expects the more than $85 billion extenders package, which includes incentives for corporate research and the wind industry, to come to the chamber floor after the Senate returns from its current two-week recess.

Chris Chocola, the Club for Growth’s president, expanded on the group’s opposition to the extenders in a Wall Street op-ed on Wednesday, saying the expired provisions illustrate how badly the tax code needs to be rewritten and that getting rid of them may help spur that process.

“It's once again time for the annual special-interest orgy known as the 'tax extender' legislation,” Chocola wrote.

“Getting rid of tax extenders might even motivate affected industries to lobby for real tax reform that would lower individual and corporate rates,” added Chocola, a former GOP lawmaker. “That's what the country needs, and tax extenders are a distraction. They've stuck around because few have bothered to fight them. We're taking up the fight, in order to clear the field for real reform.”

Chocola specifically mentioned several of the incentives in the tax extenders package, including tax breaks for commuters using bike share programs, NASCAR track owners, the entertainment industry and an incentive for thoroughbred horses backed by Senate Minority Leader Mitch McConnell (R-Ky.).

The Club president also said that the research and development credit, the most expensive part of the Senate package, isn’t as helpful as it could be to businesses because of its stop-and-start nature and because it aids already profitable companies.

The final fate of the tax extenders this year is unclear, despite the expected Senate action in the coming weeks.

House Ways and Means Committee Chairman Dave Camp (R-Mich.) is pursuing a process where provisions would either be kept permanently or remain expired. Congressional tax writers generally expect some sort of final deal on extenders to emerge in the lame-duck session following November’s midterm elections.

Chocola’s op-ed about the Senate extenders package, crafted by Finance Chairman Ron Wyden (D-Ore.) and the panel’s top Republican, Sen. Orrin Hatch (Utah), illustrates a divide between more pro-business Republicans and those like the Club for Growth that say they oppose crony capitalism. That divide is also on display in the debate over reauthorizing the Export-Import Bank.

The Club’s stance also shows that both liberals and conservatives have some skepticism about extenders. Liberal groups have complained that the tax extenders package won’t be paid for, despite the GOP’s insistence that an extension of jobless benefits be offset. Progressives also dislike provisions that give companies tax breaks on offshore income.