And, since it’s cold outside, how about some tax consideration for people who want to insulate their attics this winter?
Then, who can forget the importance of giving a tax break to the Champion family, who have lived on the same Vicksburg, Miss., farm for six generations? But it’s not just any farm. It’s where Ulysses Grant fought the battle of Champion Hill.
Congress may still resolve many of the big-ticket tax-cut items, but plenty of people and organizations are still lobbying Congress to remember them, as well. Almost all of these groups are scrambling to get Congress to renew one tax credit or another. In many cases, they are warning that failure to do so may result in thousands of layoffs.
“This is by the far the most tax uncertainty we have had at the end of the year since the income tax was instituted in 1913,” says Pete Davis, a tax expert at Davis Capital Investment Ideas in Washington and an author of the blog Capital Gains and Games.
At least 83 federal tax provisions expire at the end of the year, according to Congress's Joint Committee on Taxation website. Many of those were renewed when President Obama and the Republicans reached their agreement to extend the Bush-era tax rates for another two years. The total of expiring tax credits represents a significant amount of money.
“We are talking $30 billion, probably closer to $40 billion and maybe much higher, depending on how long they extend them,” says Mr. Davis, who worked for 11 years as an economist on the Joint Committee on Taxation.
Up for renewal are billions of dollars in energy tax credits – many of them aimed at getting consumers to buy something. For example, there are expiring tax credits for new energy-efficient homes, the installation of insulation, and more efficient windows in existing homes.
“We count on that tax credit,” says Rick Gerardi, vice president at MASCO Home Services, a large provider of insulation and energy efficiency services based in Taylor, Mich. In the case of insulation, homeowners currently receive a tax credit of as much as $1,500 for materials – although not for installation – that make their homes more energy efficient.
“We believe there will be a sharp dropoff in demand if that tax credit is not renewed,” says Mr. Gerardi. “What that tax credit does is allow us to discount upfront costs and puts that work on sale, and quite frankly, in tough times where people are concerned about borrowing, this is a very important thing.”
Still others are aimed at helping relatively young sectors, such as solar and wind energy. Without the renewal of those tax credits, referred to in Washington jargon as “tax extenders,” the industries claim tens of thousands of workers could be laid off.
“We have people being laid off right now, and we expect to see more without fast action on the tax extenders now being negotiated,” says Denise Bode, CEO of American Wind Energy Association (AWEA) in Washington.
One industry’s plea for help, however, is someone else’s opportunity to lobby for restrictions on that aid.
On Wednesday, the American Bird Conservancy, one of the largest bird conservation organizations, wrote key US senators urging that wind-power companies be required to follow federal wind energy guidelines to reduce bird deaths. The organization says the National Wind Coordinating Committee, a collaboration of the wind industry, researchers, nonprofits, and government agencies, estimates that about 3 birds are killed for every megawatt of energy wind power generates per year.
“Since the industry wants taxpayer money to fund construction of wind turbines, American Bird Conservancy thinks the burden should be on them to assure compliance with the law and not have citizens dig into their own pockets to take legal action forcing compliance,” says Robert Johns, a spokesman.
In a statement, AWEA replied, “Wind power does not pose a serious hazard to birds in general. While some birds do collide with wind turbines at most sites, modern wind power plants are collectively far less harmful to birds than are radio towers, tall buildings, airplanes, vehicles, numerous other man-made objects – and cats.”
Other nature organizations are also pressing for tax help. One is Ducks Unlimited, which represents duck hunters and counts on people being able to preserve family farms and ranches.
Ducks Unlimited, as part of a coalition called the Conservation Tax Incentive Coalition, wants Congress to help landowners who want to preserve their land save on their tax bills.
Specifically, they want Congress to allow farmers and ranchers to retire the development rights on their land by donating a conservation easement, which would keep the farm in productive use but guarantee it can’t be sold for future development. In return, the farmer or rancher gets to deduct a larger portion of their income over a longer period of time.
The tax legislation regarding conservation easements has expired. “We need Congress to make these expired conservation easement incentives a permanent part of tax law,” says Barton James, director of public policy for Ducks Unlimited in Washington.
As for the Civil War battlefield, the Civil War Preservation Trust is part of the same coalition as Ducks Unlimited. The trust would like to see families such as the Champions in Vicksburg get a perpetual conservation easement on their land in return for a tax break.
“It’s really just another tool in the kit to pursue historic preservation,” says Mary Goundry Koik, deputy director of communications at the trust, based in Washington.