Harry Reid, Senate Majority Leader, has indicated that HR4213 – better known as the “Extender Bill,” but officially known as The American Jobs and Closing Tax Loopholes Act (gotta love the names bills get these days) – is dead in the water.
From CCH:
Senate Majority Leader Harry Reid, D-Nev., on June 21 declined to commit the Senate to any immediate further action on the American Jobs and Closing Tax Loopholes Bill of 2010 (HR 4213), placing the $118-billion package of tax breaks and unemployment benefits in limbo as Democrats search for a way to attract 60 votes. A spokesperson for Reid, however, said the Senate plans to move ahead with extenders and the Majority Leader held out hope that a breakthrough is still possible.
“I hope we can move forward on the legislation we tried to finish last week,” said Reid on the Senate floor.
Senate Republicans during the week of June 14 rejected the bill when it carried a $140-billion price tag, forcing Senate Finance Committee Chairman Max Baucus, D-Mont., to come up with a pared-down version, which Republicans also blocked. Another revision by Baucus is likely if the Senate turns to the bill again.
The Senate on June 18 approved by unanimous consent a measure that would allow a six-month extension of a provision that would prevent cuts in Medicare payments to doctors. The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Bill of 2010 (HR 3962) was initially a provision in HR 4213 and its removal reduced the overall cost of the bill. Senate aides have speculated that Baucus may remove unemployment benefits and federal Medicaid funding for states from the extenders package to further reduce the cost.
Of course, that was Tuesday. On Wednesday, the Senate made multiple revisions to the bill, including further tweaks to the carried interest provisions, which taxes fees made by investment fund managers at ordinary rates, among other things.
S-Corp shareholders in services businesses should also keep an eye on this bill, which would tax not only their salaries (which already happens) but their distributions as well (which doesn’t). S-Corp advocates have objected, saying that the IRS has sufficient resources to police unequal distributions (Congress’ concern here is shareholders who take small salaries and large tax-free dividends), and that the number of ‘filching’ shareholders is small, but this provision is anticipated to raise significant sums at a time when Congress desperately needs funding sources, so expect the change to happen.
