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1 Kyle Pomerleau, Temporary Policy in the Federal Tax Code 1 (2019)

handle is hein.taxfoundation/tempftx0001 and id is 1 raw text is: 









Mar. 2019


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Temporary Policy

in the Federal Tax Code

Written  Testimony for   the  House   Ways  and   Means   Committee


Kyle  Pomerleau
Chief Economist and
Vice President of Economic Analysis


Chairman  Thompson,  Ranking  Member  Smith, and members   of the Committee,
thank you for the opportunity to speak to you today about temporary tax policy in
the Internal Revenue Code.

The Tax Foundation  is the nation's oldest organization dedicated to promoting
economically sound  tax policy at the federal, state, and local levels of government.
We  are a nonpartisan 501(c)(3) organization.

For more  than 80 years, the Tax Foundation's research has been guided by the
immutable  principles of sound tax policy which say that taxes should be neutral to
economic  decision-making, and that they should be simple, transparent, and stable.

Today, I want to discuss the important tax policy principle of stability. Taxpayers
deserve consistency and predictability in their tax code, and as such, governments
should avoid enacting temporary or retroactive tax laws. Stability is also important
for the success of any tax policy. A policy that may otherwise produce economic
growth  or other positive benefits may fail if the policy is temporary or is seen as
temporary  by taxpayers.

For more  than a decade, a collection of temporary, narrowly targeted tax provisions
for individuals and businesses have routinely expired and then been temporarily
reauthorized, earning the nickname of tax extenders. Extending these provisions,
especially retroactively, would not contribute to economic growth and would
simply be a windfall to taxpayers. The best course of action for the majority of
these narrow, temporary  tax policies would be for Congress to allow them to expire
permanently.

Besides extenders, there are major portions of the Internal Revenue Code that are
set to change or expire over the next decade. This is due to the temporary nature of
much  of the Tax Cuts and Jobs Act. These temporary provisions frontload some of
the anticipated economic growth, but because they expire, they do not contribute
to the long-run economy.

While  it was not ideal to make significant portions of the TCJA temporary, there is
now  an opportunity for lawmakers to evaluate different aspects of the TCJA and

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