The Senate Finance Committee’s Employment and Community Development Taskforce has finally released its report. Unfortunately, the consensus about WOTC subtly mentioned earlier this month by Senator Rob Portman (R-Ohio) is absent from the document. But that’s not all bad. Perhaps we need to read between the lines.
Download the report here.
Per the report, the group was tasked to examine the following six tax incentive programs:
- Indian employment tax credit
- New markets tax credit
- Mine rescue team training credit
- Work opportunity tax credit
- Empowerment zone tax incentives
- American Samoa economic development credit
The Recommendations?
The section of the report titled, “Taskforce Consensus Recommendations,” includes direct recommendations for only two of the programs: the Indian employment tax credit and the American Samoa economic development credit. The members propose some technical changes to these programs and then couch their recommendation within non-committal language: “to the extent that Congress chooses to retroactively extend or to reinstate….”
However, there are general recommendations that are quite positive. Specifically, this statement (without reference to any specific tax program):
“To the extent practicable, the taskforce members feel that tax policy should be enacted with long-term time horizons, if not on a permanent basis.”
A straightforward and direct recommendation to extend or make WOTC a permanent feature of the tax code would have been nice. Nevertheless, we are also happy with a general recommendation toward long-term and permanent programs.
It’s Not Bad, Really.
The task force’s choice to not make a specific recommendation for WOTC is not all bad. There were no negative observations or recommendations for the program. All of the WOTC-related content in the report presents reasons to improve, expand and keep the WOTC program alive while the task force members themselves avoid making more direct recommendations on the subject.
Particularly interesting to me are the lists of 10 current House and 6 current Senate bills, all proposing to expand the reach or extend the life of WOTC in one way or another. None of the other tax incentives discussed in the report can boast this much positive legislative interest.
Conclusion: There is, in context, a lot of support for the WOTC program in this seemingly non-committal document.
Corrections: 09/03/2019, this post has been edited to make two corrections.
- In the original, a statement in the first paragraph referenced task force members’ “agreement to disagree.” This was meant as a figure of speech and reflected my view (at that time) that the task force had not reached a consensus about the Work Opportunity Tax Credit. It was not my intention to suggest that the task force members had in any way actually reached an agreement to disagree about any thing. It was a poor choice of words that has caused dismay for some readers. I have removed that statement.
- The original reflected a view of the report that was incomplete. After edits, a more level view is presented.
Vaughan,
You and I read very different reports. The Report was not a disappointment. While they make no specific WOTC permanency recommendation, on P. 17 under “Taskforce Consensus Recommendations” in the first paragraph they indicate that they are talking about all six provisions they reviewed and in the last sentence of that paragraph their recommendation is, “To the extent practicable, the taskforce members feel that tax policy should be enacted with long-term time horizons, if not on a permanent basis.” Thus the are recommending either a long-term or permanent extension for these provisions. Their specific recommendations on the Indian Employment Credit and on the American Samoa Credit are technical in nature and come after they recommend a long-term or permanent extension for the provisions considered by the Taskforce. I would also point out the the specific IEC recommendation is designed to insure it is an incremental credit and thus can’t be gamed and for the American Samoa credit, that the credit should be “moved into the Internal Revenue Code rather than existing through amendments to Code provisions that have since been repealed.” These are more technical then substantive in nature. That said, the report indicates that there were recommendations submitted that called for their elimination of the IEC, American Samoa Credit, Empowerment Zones, and New Markets. Yet there were no calls for the elimination of WOTC, rather there were 61 comments calling for making it permanent and 16 bills introduced calling for expanding it including comments by two senators. This was far more positive commentary on WOTC than on another other provisions considered. In fact, there were no negative comments filed regarding WOTC. Please show me where the report indicates “an agreement to disagree”. The only agreement was that extensions should be long-term, if not permanent. I am concerned by the accuracy of what you have reported and even more that your readers will be mislead.
William, thank you for your comment and for your phone call today. Based on your insights and input, I believe that my original perspective on the task force’s report was incomplete and as a result, my original post was too negative. I’ve reviewed the report again and made edits to this post that I feel were important. I will always welcome your perspective, especially given your long professional experience with Congress in general and with WOTC specifically.