WASHINGTON - Late Tuesday night, the U. S. Senate reached an agreement with the House on a package of four dozen tax breaks for businesses and individuals totaling $41 billion. But even those supporting passage recognize that it may not accomplish its goals of economic growth.
Among the tax breaks included in the package are deductions for teachers who buy classroom supplies and breaks for businesses for expensing and depreciation of equipment.
Maine Republican Sen. Susan Collins says she supports the package because she believes it should help create jobs. "From talking with employers throughout the state, I have found that many of them have put their plans for buying new equipment, or hiring new workers, on hold," Collins says.
But David Clough, Maine state director of the National Federation of Independent Businesses, says the one-year extension does not help businesses that are trying to plan their investments for the future. He says to plan, invest and create jobs, businesses need a long-term tax policy.
"They’re kind of rolling over the benefit from one year to the next," Clough says, "but what you need is more than just a one-year extension so you can make long-term plans."
Clough says while some business owners have made assumptions about what Congress would do, others have not taken that risk, and have held off on investments hoping for a federal tax overhaul.
Maine Independent Sen. Angus King says it's time for Congress to move forward on the issue. "I see this as a down payment on tax reform," he says. "We really need comprehensive tax reform. We haven’t really looked at the tax code in a comprehensive way since 1986."
But King says that overhaul will have to be funded, and that means that some taxes may have to go up to lower others, and existing programs may need to be cut. One of his major concerns is that, unlike other spending bills passed this year, the tax breaks adopted by Congress for 2014 have not been paid for.
"While I agree with the tax provisions that are in the bill, it bothers me that it’s kind of a double standard and we are increasing the deficit," King says.
Collins says Congress should tackle tax reform in the new session.
Both Congresswoman Chellie Pingree, a Democrat, and Republican Congressman-elect Bruce Poliquin, also want tax reform, but they differ on what those tax changes should be.
