[Congressional Record Volume 160, Number 154 (Monday, December 15, 2014)]
[Senate]
[Pages S6833-S6834]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                             Tax Extenders

  Mr. NELSON. Madam President, I wish to speak about a tax bill that is 
coming up that is fairly necessary for the country. The Senator from 
South Dakota and I have the privilege also of serving on the Finance 
Committee, and there is an example where we just haven't been able to 
get a lot done. Now, here we are at the eleventh hour and fifty-ninth 
minute with a whole bunch of provisions about to expire that are 
extremely important to American taxpayers, such as the research and 
development tax credit.
  American businesses and American taxpayers would like to have some 
certainty of knowing, as they are doing their planning for the year, 
that they can plan on this or that deduction or tax credit. In 
Congress, for the entire past year, we have not had etched into law, 
because it has expired, a number of these tax deductions and credits 
that I am going to go through. But the R&D tax credit is only one 
example.
  So how in the world can American business and the American taxpayers 
plan? Take, for example, the Senator has a State where agriculture is 
predominant. So does this Senator.
  There are a number of ranchers in the State of Florida who want to 
donate a conservation easement on their property to keep that property, 
in this case of ranching families, that they have been ranching for 
centuries. They want that way of life to continue.
  There is an interest in environmental restoration; for example, the 
Everglades restoration, that the headwaters that ultimately flow to the 
Everglades be preserved from being developed. So there is an interest 
in the environment to obtain the development rights or a conservation 
easement.
  It is clearly in the interests of the taxpayer, likewise, to have 
observed that conservation easement because that is the easiest way of 
cleaning up the water that ultimately flows into the Everglades. So the 
conservation easement is a win-win-win. It is a win for the rancher, it 
is a win for the taxpayer, and it is a win for the environment.
  But the poor ranchers, because we have not passed the tax extenders 
bill, here they are at the end of the year and they would like to make 
the donation of the conservation easement. How are they going to get it 
done in the next couple of weeks if we don't pass it until almost the 
midnight hour?
  It is just another example, and I look forward to working with the 
Senator from South Dakota. I hope we can pass it this week so at least 
some of it can be salvaged before the end of this tax year.
  I have given two examples and I will give another: the wind energy 
production tax credit. It provides a credit for electricity produced by 
the wind.
  There is a lot of wind out in the middle of this country. It is a 
good way to produce electricity. It is called renewable electricity. It 
has brought our electricity sector into the 21st century. It has 
reduced our dependence on carbon-based electricity.
  It makes sense. If someone visits a country such as Denmark, look how 
many windmills there are. I still call them windmills, but they are 
wind turbines. They are highly sophisticated, finely tuned machines, 
blades that will take the least bit of wind and turn that big blade 
that is hundreds of feet long. As it turns, it is generating 
electricity.
  Yet for the entire past year people who want to establish these wind 
farms don't have any certainty that they will be able to get this wind 
energy production tax credit.
  The purpose for the tax credit is to give the businesses an incentive 
to establish wind farms which, No. 1, becomes a win for the 
environment; No. 2, becomes a win for the business that is in the 
business of wind energy production; and, No. 3, becomes a win for the 
consumers because it is weaning us from producing electricity only from 
a carbon-based fuel that ultimately sends CO2 into the 
atmosphere. We know what is happening with a lot of CO2 up 
there, it creates the greenhouse effect.
  As the Sun's rays come in and bounce off the surface of the Earth and 
reflect or radiate back out into space, suddenly the glass ceiling--the 
greenhouse effect of carbon dioxide and other greenhouse gases--traps 
that heat. What happens? The increasing temperature of the planet, 90 
percent of that heat is absorbed into the oceans and, as a result, we 
are seeing the sea level rise.

  For a State such as mine, the State of Florida, NASA has measured 
over the past 50 years--not drafts, not projections, measurements--5 to 
8 inches in South Florida of sea level rise in Florida.
  By the way, check the papers. Yesterday the pumps didn't work. Alton 
Road in Miami Beach was flooded. The mayor of Miami Beach, when he was 
campaigning 1 year ago, went in a kayak down Alton Road as a 
demonstration of how the sea level rise at high tide is flooding 
streets of Miami Beach. It brings me back to this extenders tax bill we 
need to pass this week: the wind energy production tax credit.
  Another example is the work opportunity tax credit, which encourages 
people who work to hire disadvantaged people. It provides a tax credit 
for businesses that hire people who have a difficult time getting a 
job. It encourages the private sector to help these folks get out of a 
difficult spot in their lives, because they have disadvantages, to 
become independent, to stand on their own two feet because they can go 
to work. That is the purpose of a tax credit for work opportunity, but 
that hasn't been in effect all this year, 2014.
  We pass this tax extenders bill and it will retroactively take it 
back to the 1st of the year and make this tax credit--and these others 
I have mentioned--available as people are calculating their Federal 
income tax for the calendar year 2014.
  Another is rollover IRAs to charities. It is when you get to a 
certain age--and I believe the age is 70--and you have an IRA. By law, 
setting up the IRAs which are nontaxable--recall all the years you put 
money in those IRAs, you put that money into the IRA before you paid 
tax on it.
  When you bring money out of the IRAs that you have had all of your 
life, you are going to pay the tax, and that more than likely is going 
to be during your retirement years. That is what an IRA is for. It is 
called an Individual Retirement Account.
  By law, under the IRA law, when someone gets to be 70, they have to 
start taking out a certain amount of that IRA.
  We have had a provision in the Tax Code that is an incentive to give 
that money that people have to take out to charity. Therefore, it 
provides an easier way for people who have to take the money out of 
their retirement accounts to give that money to charity because, when 
they take it out, it doesn't become taxable before they give it to the 
charity.
  In other words, it is a transfer of the tax-free dollars in the IRA 
directly

[[Page S6834]]

over to charity. It is a win for the taxpayer, and it is a win for the 
charitable organizations because there is an incentive there to give 
that money to charitable organizations.
  If we don't pass this tax extenders bill, that is not available for 
all of this year of 2014. Think what that is going to do to some 
charities and what it is going to be doing to taxpayers who have been 
planning on that deduction and suddenly find it is not available.
  Another example is there are a few States--maybe half a dozen--that 
do not have a State income tax, but often the State government is in 
fact funded by the State sales tax. My State of Florida is one of those 
States. The State of Washington is another, and the State of Texas is 
another. There are about three others.
  Therefore, if someone is in a State that has a State income tax, and 
they are calculating their Federal income tax, they can deduct the 
State income tax in the deduction of the Federal income tax.
  What about the poor people in the States that don't have the income 
tax? They should be able to deduct the similar tax that we pay in our 
States, the State sales tax, and that provision has been there in the 
Tax Code, but it is not in there for 2014 because it lapsed, and we 
need to reenact it.
  This is not a way to run a railroad and tax policy, but 
unfortunately, because it seems to have the word ``tax'' to it, it 
seems to be radioactive and, as a result, we have to wait until the 
eleventh hour and the fifty-ninth minute to pass it.
  I certainly hope we will pass it this week.
  Let me give you another example--the deduction for mortgage insurance 
premiums. When you want to buy a home, the bank negotiates and sets up 
a mortgage so you can buy the home. Most banks will require you to take 
out an insurance policy should you fail to pay on that mortgage. We 
have always had the deductibility of that insurance premium in 
calculating Federal income taxes, and it particularly helps low- and 
middle-income people deduct the amount they pay for private mortgage 
insurance. So, therefore, what does that do? That helps those low- and 
middle-income folks buy a home.
  Isn't home ownership something that is desirable in America? I think 
so. Well, we better pass this tax extenders bill.
  I will give another example--excluding forgiven mortgage debt from 
income. It allows people to exclude forgiven mortgage debt from their 
income. Why am I raising this? Well, haven't we just gone through the 
worst recession since the Great Depression? Didn't some people get so 
upside down in their mortgage--with their mortgage being at this level, 
but the value of their home dropping to this level--so that they owed a 
much greater amount on their mortgage than the value of their home? 
What they tried to do was work with the purchaser and the bank that 
holds the mortgage. That is called a short sale. The bank forgives part 
of that debt--the difference between the mortgage amount and the value 
of the home.
  The poor taxpayer, the homeowner, instead of treating what they have 
been forgiven as income--they have just had to take a shellacking 
because of the value of their home dropping below the value of the 
mortgage. Lo and behold, when they get a break and sell in a short 
sale, they end up having to pay income tax on that amount of debt that 
was forgiven.
  I don't think we want to do that. That is why we have this provision 
to exclude that debt forgiveness from the income tax. But for all of 
the last 12 months it is not going to be forgiven if we can't pass this 
tax extenders bill. I think we better get serious about it. We are 
talking about looking at this as the last piece of legislation this 
week to pass before we leave. We better get serious about it.
  And lastly, let me say that every one of us wants to treat teachers 
the right way. Teachers haven't been treated the right way. As a matter 
of fact, a lot of teachers are pulling money out of their own pockets 
because their school districts are not providing enough money for 
school supplies for those little children. Those unselfish teachers are 
going into their own pockets to bring out money to provide the supplies 
so the kids can learn. Now if a courageous and unselfish teacher does 
that, should we not at least give them a deduction of that amount they 
paid for those school supplies for their children? Shouldn't we let 
them deduct that in calculating their income tax?
  We have in the past. But we haven't for calendar year 2014--this 
present year. And that is another one of the deductions that I hope the 
Congress will pass this week in order to take care of our people.
  But as we go through this in the future, why do we have to keep 
waiting until the last minute so people can't plan, so people get 
nervous, so people don't know what to do, so people don't know how to 
invest, so people don't know how to preserve their land, their 
business, and the future for their families? This is no way to run a 
railroad.
  Let us at least salvage some kind of victory from the jaws of defeat. 
I hope we will pass this bill in short order.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Walsh). The Senator from Vermont.