Language (though not yet a score) is out for the Senate "jobs bill" which will be considered after the President’s Day recess. The cheesy DC acronym is the "HIRE Act" (which stands for "Hiring Incentives to Restore Employment"). The major tax provisions are:
- Forgiving the employer half of Social Security taxes for the rest of the year for any employee hired from the unemployment line
- Giving employers a $1000 tax credit for retaining a worker the whole year, and for not cutting his wages more than 20% in the second half of the year
- One-year extensions of energy, personal, and business extenders (including small business expensing)
- Disclosure of bank account information from foreign countries–a probable precursor to seizing those funds in tax disputes
- Codification of the "economic substance doctrine" which empowers the IRS to disallow a legal tax deduction or other mechanism if the IRS deems the transaction to lack "economic substance." In other words, even if something is allowed under tax law, it will be disallowed if the IRS doesn’t think it "smells right." This gives way too much power to the IRS to decide what passes their smell test
All told, this is likely to be a net tax cut (the JCT and CBO scoring won’t be out until next week, in all liklihood).
However, this latest tax bill continues a troubling trend: "paying for" present-law tax relief (for one more year) by permanently-enacting new tax hikes. If that trend continues, there will be a new series of tax hikes every year just to "pay for" what we already have in the way of tax relief.