[Congressional Record Volume 160, Number 63 (Wednesday, April 30, 2014)]
[Senate]
[Pages S2559-S2560]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CBO COST ESTIMATES
Mr. WYDEN. Mr. President, on Monday, the Finance Committee reported
S. 2260, the Expiring Provisions Improvement Reform and Efficiency
(EXPIRE) Act of 2014, and S. 2261, the Tax Technical Corrections Act of
2014.
At the time that the bills and accompanying reports were filed, the
statements of the Congressional Budget Office, required under section
402 of the Budget Act, were not yet available, and, in each case, the
committee report indicated that the statements would be provided
separately.
I ask unanimous consent to have the CBO statements printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 29, 2014.
Hon. Ron Wyden,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for the Tax Technical
Corrections Act of 2014.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Logan
Timmerhoff.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
Tax Technical Corrections Act of 2014
The Tax Technical Corrections Act of 2014 would make
various clerical corrections, clarifications, and conforming
and other technical changes to the Internal Revenue Code.
Those provisions that the bill would modify were originally
enacted in a variety of laws, including the American Taxpayer
Relief Act of 2012, the American Recovery and Reinvestment
Act of 2009, and the American Jobs Creation Act of 2004. In
addition, the bill would repeal many elements of the Internal
Revenue Code that are not used in computing current taxes and
thus are obsolete.
The staff of the Joint Committee on Taxation (JCT)
estimates that the bill would have no budgetary effect.
Enacting the bill would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
JCT has determined that the bill contains no
intergovernmental or private-sector mandates as defined in
the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Logan
Timmerhoff. The estimate was approved by David Weiner,
Assistant Director for Tax Analysis.
____
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 29, 2014.
Hon. Ron Wyden,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for the Expiring
Provisions Improvement Reform and Efficiency (EXPIRE) Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Barbara
Edwards.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
Expiring Provisions Improvement Reform and Efficiency
(EXPIRE) Act
Summary: The Expiring Provisions Improvement Reform and
Efficiency (EXPIRE) Act would reinstate and extend certain
expired and expiring tax provisions through December 31,
2015; most of the provisions expired on December 31, 2013,
and would be retroactively reinstated, but a few are
scheduled to expire on December 31, 2014. In some cases those
provisions would be extended and amended. The bill also would
make several additional changes to tax law.
The staff of the Joint Committee on Taxation (JCT)
estimates that enacting the bill would reduce revenues by
about $81.3 billion over the 2014-2024 period. A small
portion of those estimated reductions in revenues, less than
$0.1 billion over the period from 2014 to 2024, results from
off-budget (social security) revenues. CBO and JCT also
estimate that the bill would increase direct spending by $2.8
billion over the 2014-2024 period.
On net, JCT and CBO estimate that enacting the bill would
increase deficits by about $84.1 billion over the 2014-2024
period. Pay-as-you-go procedures apply because enacting the
legislation would affect revenues and direct spending.
JCT has determined that the provisions of the bill contain
no intergovernmental or private-sector mandates as defined in
the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impacts of the bill are shown in the following
table.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
------------------------------------------------------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-2019 2014-2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Individual Tax Extensions...................... -1.0 -8.7 -6.5 -0.3 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -16.6 -17.0
Business Tax Extensions........................ -21.8 -100.5 -8.1 32.4 20.5 14.4 8.5 3.6 1.4 -0.2 -0.6 -63.1 -50.4
Energy Tax Extensions.......................... -2.0 -3.5 -1.6 -0.5 -1.0 -1.4 -1.7 -1.8 -1.9 -2.0 -2.1 -10.1 -19.6
Debt Collection Contracts...................... * 0.1 0.4 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 1.9 4.8
Other Provisions............................... * * * 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.3 1.0
Total Revenues............................. -24.8 -112.6 -15.8 32.0 20.0 13.6 7.4 2.4 0.1 -1.6 -2.1 -87.6 -81.3
On-budget.............................. -24.8 -112.6 -15.8 32.0 20.0 13.6 7.4 2.4 0.1 -1.6 -2.1 -87.5 -81.3
Off-budget............................. * * * 0 0 0 0 0 0 0 0 -0.1 -0.1
CHANGES IN DIRECT SPENDING
Debt Collection Contracts
Estimated Budget Authority................. * 0.1 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 1.0 2.4
Estimated Outlays.......................... * 0.1 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 1.0 2.4
Rum Excise Tax Payments
Estimated Budget Authority................. 0.1 0.2 * 0 0 0 0 0 0 0 0 0.3 0.3
Estimated Outlays.......................... 0.1 0.2 * 0 0 0 0 0 0 0 0 0.3 0.3
Health Coverage Credit
Estimated Budget Authority................. * 0.1 * 0 0 0 0 0 0 0 0 0.1 0.1
Estimated Outlays.......................... * 0.1 * 0 0 0 0 0 0 0 0 0.1 0.1
Child Tax Credit
Estimated Budget Authority................. 0 0 * * * * * * * * * * *
Estimated Outlays.......................... 0 0 * * * * * * * * * * *
Total Direct Spending
Estimated Budget Authority............. 0.2 0.3 0.3 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 1.4 2.8
Estimated Outlays...................... 0.2 0.3 0.3 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 1.4 2.8
NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Effect on Deficits 25.0 112.9 16.0 -31.8 -19.8 -13.3 -7.1 -2.1 0.2 1.9 2.4 89.0 84.1
On-budget.................................. 25.0 112.9 16.0 -31.8 -19.8 -13.3 -7.1 -2.1 0.2 1.9 2.4 88.9 84.1
Off-budget................................. * * * 0 0 0 0 0 0 0 0 0.1 0.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Congressional Budget Office and staff of the Joint Committee on Taxation.
Note: Details may not add to totals because of rounding; * = between -$50 million and $50 million.
[[Page S2560]]
Basis of estimate: JCT provided the estimates of all
provisions except one dealing with outlays of certain rum
excise taxes. The estimates reflect an assumed enactment date
of July 1, 2014.
Extensions of individual tax provisions: The individual
income tax provisions would reduce revenues by $17.0 billion
and increase outlays by $0.1 billion over the 2014-2024
period, JCT estimates. Those amounts include, among others,
the extension of provisions that allow:
Individuals to claim state and local sales taxes as an
itemized deduction in lieu of state and local income taxes in
calculating their individual income tax liability; JCT
estimates that the revenue reduction would total $6.5 billion
over the 2014-2024 period.
An exclusion from gross income for the discharge of
indebtedness on a principal residence; JCT estimates that the
revenue reduction would be $5.4 billion over the 2014-2024
period.
Individuals to claim the refundable health coverage tax
credit, which JCT estimates would reduce revenues by $28
million and increase outlays for refundable tax credits by
$106 million over the 2014-2024 period.
Extensions of business tax provisions: The business tax
provisions would reduce revenues by $50.4 billion over the
2014-2024 period, JCT estimates. In addition, CBO estimates
that outlays would increase by $0.3 billion over the 2014-
2024 period. Those amounts include, among others, provisions
that allow:
Businesses to qualify for both additional first-year
depreciation of 50 percent of the basis for qualifying
property and additional expensing (that is, immediate
deduction from taxable income) for qualifying property under
section 179 of the Internal Revenue Code. JCT estimates that
those provisions would reduce revenues by $101.8 billion over
the 2014-2015 period, and increase revenues by $95.7 billion
over the 2016-2024 period, with the net effect of reducing
revenues by $6.0 billion over the 2014-2024 period.
Businesses to claim the research tax credit, which JCT
estimates would reduce revenues by $16.0 billion over the
2014-2024 period. The provision would extend the credit in
effect in 2013 in modified form.
Certain foreign subsidiaries that engage in banking,
financial, and related businesses to defer taxation of
certain income until it is repatriated to the U.S. parent
corporation; JCT estimates that the provision would reduce
revenues by $10.4 billion over the 2014-2024 period.
The Treasuries of Puerto Rico and the Virgin Islands to
receive increased payments relating to excise taxes on rum
manufactured in those places as well as rum imported from
other countries. CBO estimates that those payments, which are
recorded in the budget as outlays, would total $336 million
over the 2014-2024 period.
Extensions of energy tax provisions: The extension of the
energy tax provisions would lower revenues by about $19.6
billion over the 2014-2024 period. The provision with the
largest effect on revenues--reducing them by an estimated
$13.3 billion over the 2014-2024 period--would extend to the
end of 2015, the date by which construction must begin in
order for renewable power facilities to be eligible for the
electricity production credit or the investment credit in
lieu of the production credit.
Debt collection contracts: The bill would require the
Internal Revenue Service (IRS) to contract with private
collection agencies to collect payments of certain tax
liabilities. JCT estimates that the provision would increase
revenues by $4.8 billion over the period from 2014 to 2024.
The IRS would retain up to 25 percent of the amount collected
by the private collection agencies to pay for the services of
those collection agencies. In addition, up to an additional
25 percent would be retained by the IRS to fund a program of
personnel hiring and training related to tax compliance, and
to administer the contracts with private collection agencies.
As a result, direct spending would increase by $2.4 billion
over the 2014-2024 period.
Other provisions: JCT estimates that the remaining
provisions in the bill would increase revenues by $1.0
billion over the 2014-2024 period. The provision with the
largest effect on revenues would allow the Treasury
Department to levy up to 100 percent of a payment to a
Medicare provider to collect unpaid taxes; JCT estimates that
the provision would increase revenues by $0.8 billion over
the 2014-2024 period. JCT also estimates that a provision
that would apply penalties to tax preparers who fail to
exercise certain due diligence requirements for claims of the
refundable child tax credit would reduce outlays for
refundable tax credits by $40 million over the 2014-2024
period.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in revenues and outlays that are
subject to those pay-as-you-go procedures are shown in the
following table. Only on-budget changes to outlays or
revenues are subject to pay-as-you-go procedures.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR THE EXPIRING PROVISIONS IMPROVEMENT AND EFFICIENCY (EXPIRE) ACT, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FINANCE ON APRIL 3, 2014
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014-2019 2014-2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT
Statutory Pay-As-You-Go Effects.............. 24,959 112,872 16,007 -31,824 -13,332 -7,137 -2,143 153 1,875 2,388 88,921 84,058
Memorandum:
Changes in Revenues...................... -24,797 -112,587 -15,753 32,045 19,994 13,574 7,390 2,408 125 -1,583 -2,083 -87,526 -81,272
Changes in Outlays....................... 162 285 254 221 231 242 253 265 278 292 305 1,395 2,786
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Congressional Budget Office and staff of the Joint Committee on Taxation.
Intergovernmental and private-sector impact: JCT has
determined that the provisions of the EXPIRE Act contain no
intergovernmental or private-sector mandates as defined in
UMRA.
Estimate prepared by: Federal Revenues: Barbara Edwards and
staff of the Joint Committee on Taxation Federal Spending:
Matthew Pickford
Estimate approved by: David Weiner, Assistant Director for
Tax Analysis.
____________________