Republican Study Committee (RSC) Chairman Bill Flores (R-TX) today outlined the conservative group’s priorities for the tax extender package Congress is set to consider before the end of the year.
“As the House prepares to consider several costly tax extenders, we must ensure that we craft a package that will spur growth, not subsidize ineffective programs or policies,” Chairman Flores said in a statement. “Special interest giveaways like the wind production tax credit (PTC) and the solar investment tax credit (ITC) have overstayed their welcome and their usefulness. We should allow these programs, which amount to the federal government picking winners and losers, to be phased out as scheduled.
“We must also improve the integrity and accountability for tax extenders that we may renew,” Chairman Flores continued. “We should not renew stimulus legacy items like the expanded Earned Income Tax Credit (EITC) and the additional Child Tax Credit (CTC) without making significant improvements to the programs’ verification and oversight. Currently, these benefits can be easily acquired without proper identification or proof of legal status, leading to billions of dollars in waste and abuse each year. Once tax credit status is obtained, it is nearly impossible to revoke, perpetuating a cycle of tax fraud.
“Finally, we must maintain current law regarding Obamacare’s disastrous risk corridor program, which is essentially a hidden bailout for insurance companies. Hardworking American taxpayers should not have to pay for the financial failures of Obamacare. Any tax extender package – or omnibus funding package – that perpetuates the risk corridor program is unacceptable,” Chairman Flores concluded.
Background
Ending the Wind PTC: For more than two decades, taxpayers have heavily subsidized the wind industry. Extending the wind production tax credit (PTC) retroactively for just one year would cost taxpayers an estimated $6.4 billion.
Letting the Solar ITC Expire: The solar investment tax credit (ITC) is set to expire in 2016 and should be phased out as scheduled. Residential solar power was a $13 billion market in 2014, eliminating the need for continued government assistance.
Improving Integrity for Earned Income Tax Credit & Child Tax Credit Programs: The Internal Revenue Service estimates that as much as 26 percent of Earned Income Tax Credit (EITC) payments made each year are fraudulent. The Treasury Inspector General for Tax Administration estimated that wrongful EITC payments cost taxpayers $14.5 billion in 2013, and that phony Child Tax Credit (CTC) claims cost another $7 billion. Anything with a more than 2.5 percent error rate should be deemed “high risk,” but the IRS has failed to flag these programs as problematic.
Protecting Taxpayers from Obamacare’s Insurer Bailout: The Obama Administration counted on using general funds to support its costly risk corridor program, which would have added to our $18 trillion national debt. Congress took action to protect American families by ensuring that the risk corridor program must be budget neutral and can only draw funds from insurance taxes. With so many losses being posted, the Administration has stated it may look to secure more funding in 2016, ignoring the larger problem: that an unsustainable marketplace will drive insurers away completely. Recently, one of the nation’s largest insurers announced it was scaling back its efforts on the Obamacare exchange after significant losses and might exit the market entirely.
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