Feb. 14 (Bloomberg) -- Extending U.S. tax credits and deductions is a priority for new Senate Finance Committee Chairman Ron Wyden, even as he indicates there won’t be any major tax changes for individuals or businesses this year.
“My hope is that we can get them re-enacted promptly,” Wyden said of the tax breaks in an interview on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “Then use them as a bridge to more comprehensive reform.”
Wyden, an Oregon Democrat, suggested the broader tax code changes won’t happen soon. Republicans and Democrats are lowering expectations of passing major legislation before the November elections that will determine control of Congress for President Barack Obama’s final two years in office.
“We’ve got a big challenge of bringing people together,” Wyden said in his first interview since taking the helm of the finance panel.
Wyden, 64, also indicated support for a rule proposed by the Internal Revenue Service, and opposed by House Republicans, that could limit political spending from outside groups officially classified as non-profit social welfare organizations.
Wyden and Republican Senator Lisa Murkowski of Alaska are sponsoring what they consider “even-Steven” legislation requiring all groups spending money on politics -- including those with 501(c)(4) status -- to disclose their donors. The change would include groups that support Republican and Democratic candidates.
Wyden, confirmed Feb. 12 as finance chairman, commented on a lawsuit filed this week by Senator Rand Paul, a Kentucky Republican, claiming that the U.S. National Security Agency’s electronic surveillance of telecommunications is illegal.
While saying he is “not up on all the details of the lawsuit,” Wyden said, “It is unconstitutional to collect millions and millions of phone records on law-abiding Americans. It violates the Fourth Amendment.”
Later, in a statement e-mailed by his office, he said, “I believe that legislation, not a Senate-brought lawsuit, is the only effective way to stop this behavior of the NSA.”
The goal of broader revisions to the tax code was being pursued by the previous finance panel chairman, Max Baucus of Montana, who was confirmed last week as U.S. ambassador to China. Also pushing for the revision has been Representative Dave Camp, a Michigan Republican and chairman of the House Ways and Means Committee.
Wyden said he would prefer that an extension of about 50 tax breaks that expired last year, including a decades-old credit for research and product development by businesses, be accomplished as part of a broader tax-code revision. Yet he said other political developments have sidetracked the efforts to pass the more sweeping legislation.
“The reality is, when the House leadership last November, in effect, declared that Obamacare was their primary issue, that changed the timetable,” Wyden said, referring to Republican opposition to the Affordable Care Act.
As a result, Wyden said, “I am not going to sacrifice important matters like research and development and innovation on the altar of perhaps some inaction on comprehensive reform.”
Along with the research and development credit, others among the expired breaks provide incentives for the renewable energy industry and allow older taxpayers a deduction for college tuition payments they make for their grandchildren.
While Obama has said he supports simplifying the corporate tax code ahead of any changes for individual taxpayers, Wyden said that also would be a “challenge.”
“It is very hard to bite off just one piece of it,” Wyden said.
Wyden said he would like individuals’ tax payments to “get closer to parity between income from investment and income from wages.”
He backed tax code revisions in 2010 that included repealing the alternative minimum tax and exempting the first 35 percent of capital gains and dividends from taxes.
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