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Life and Death to Taxes

Finance Panel Tackles Everything

While health care reform is a lofty goal for most lawmakers, tackling the issue is merely a warm-up for Senate Finance Chairman Max Baucus (D-Mont.), who will move on multiple fronts once health reform is approved — assuming it is.

Baucus hopes to advance his health bill to President Barack Obama by August, and he then plans to focus on numerous issues ranging from routine tax bills to revamping the energy sector.

It’s all part of the committee’s broad and meaty portfolio. Health care is sure to be the most controversial and time-consuming issue the committee addresses this year, but energy may not be far behind.

“In terms of looking at renewable energies and energy reform, the Finance Committee will play a role there,” said Sen. Blanche Lincoln (D-Ark.), a member of the panel. “I think that will be a big part of what we’ll do after heath care reform because that is probably the timeline that energy will start coming up.”

The Finance panel is charged with locating revenue for nearly all Congressional initiatives. Lincoln predicts Members will look within the energy industry to find ways to pay for new energy programs.

“I think one of the things that the committee has tried to stress is we keep it relative to the things we’re dealing with,” she said, adding, “Where we have outdated incentives or industries that are mature, who no longer need much incentifying, we can balance out some of that as we look toward energy reform and renewable energy.”

Within the budget Obama presented to Congress are options for taxing the oil industry, and some are quite lucrative. Creating tax incentives for the production of clean, renewable energy is the No. 1 priority for Sen. Jeff Bingaman (D-N.M.), chairman of the Finance Subcommittee on Energy, Natural Resources and Infrastructure. He doubles as chairman of the Energy and Natural Resources Committee, which is also examining energy reform, and he’s poised to play a huge role in whatever gets passed this year.

For taxes that affect individuals and non-energy businesses, Baucus plans to move a routine tax bill commonly known as “extenders” that revives tax breaks on the verge of expiration.

“We’re going to do an extenders bill by the end of the year,” said Cathy Koch, Baucus’ tax chief on the committee. “We always do.”

Undertaking extenders this year is welcome news to lobbyists who feared Congress might forgo the issue after lawmakers used the $789 billion economic recovery bill to shield middle-income wage earners from the alternative minimum tax for 2009.

Normally, extending AMT relief is a catalyst for moving extenders since inaction on the tax would force millions of American to pay more in taxes than necessary. But with a temporary AMT fix in place, and the bulk of other extenders not expiring until 2010, many tax experts thought lawmakers might postpone debate on the issue until next year. The delay would have created tax-planning headaches for businesses that base decisions on certain provisions remaining a part of the tax code.

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