A Plea from the Left and the Right to End ‘Temporary’ Tax Breaks

A Plea from the Left and the Right to End ‘Temporary’ Tax Breaks


There aren’t many issues that the left-leaning Economic Policy Institute and the right-libertarian, Koch-funded Freedom Partners can agree upon, but putting an end to Washington’s annual ritual of renewing tax breaks for special interest groups is one of them.

Most years, Congress passes a package of “tax extenders” that dole out breaks to an odd lot of industries and interests, ranging from biofuel processors to race track owners. On Thursday, a diverse group of think tanks and political non-profits issued a joint letter calling on lawmakers to bring that dubious tradition to a close. While the numbers involved tend to be small relative to the size of the budget — the Joint Committee on Taxation said the package of extenders contained in Congress’ budget deal earlier this year would cost about $17.4 billion in lost revenue over 10 years — the process of extending them makes for bad policy.

“On behalf of our organizations and the broader public interest, we are writing to urge your support for ending the practice of temporary ‘tax extenders’ once and for all,” the letter said. “Though our organizations span the political spectrum, we all agree that it is time to stop making tax policy one year at a time. Continuing to renew special-interest tax giveaways on a temporary and often retroactive basis is bad tax, fiscal, and economic policy.”

In addition to EPI and Freedom Partners, signatories include the heads of the Institute on Taxation and Economic Policy, U.S. Public Interest Research Group, Americans for Prosperity, Heritage Action for America and the Committee for a Responsible Federal Budget.

The statement drew supportive remarks from across the political spectrum:

  • “I wish I was an organization so that I could sign this letter too.” – Jason Furman, who served as President Obama's chairman of the Council of Economic Advisers
  • “I wholeheartedly endorse this letter as well. The annual ‘tax extenders’ are just a mess of useless special interest tax provisions.” – Brian Riedl, Manhattan Institute
  • “Endorse. As I testified earlier this year, the last thing Congress should be doing after TCJA is digging the revenue hole deeper by extending tax breaks without offsetting the cost. And it's even dumber to extend them retroactively.” – Seth Hanlon, Center for American Progress

There’s always a wrinkle: The Wall Street Journal’s Richard Rubin noted that while the letter represents “quite a left-to-right coalition,” the authors seem to have ignored an obvious problem: politics. “The challenge is that not all tax extenders are the same,” Rubin wrote. “Even if members agreed that temporary policy (esp retroactive temporary policy) is bad, members have quite different views on which should be permanent and which should vanish.”