House passes bill to extend charitable-giving tax credits

The House passed legislation on Thursday that would permanently renew three tax credits for charitable giving.

Democrats largely support the underlying tax breaks. But the vote fell generally along party lines, 279-137, because many Democrats don’t think the credits should be made permanent without offsets. In total, 39 Democrats joined with all but one Republican in support of the bill.

The measure extends three tax credits: the deductions for contributions of food inventory, allowing tax-free distributions from individual retirement accounts for charitable purposes, and the deduction for contributions of conservation easements to preserve land.

Republicans said making the tax credits a permanent part of the tax code, rather than renewing them every year, would provide more certainty.

“Washington has a really bad habit of letting really important provisions expire only to renew them retroactively. This has got to stop and we are trying to fix this,” said House Ways and Means Committee Chairman Paul Ryan (R-Wis.). 

Democrats said that Congress should first establish how it will pay for extending the tax credits on a permanent basis. House Minority Whip Steny Hoyer (D-Md.) said doing otherwise amounted to pretending the extension is a “free lunch.”

“I’m not for free lunches. I’m for a lot of these tax cuts, but I’m not for taking it of our of the mouths of children,” Hoyer said, “I’m not for taking it out of NIH, I’m not taking it out of our national security. We got to pay for what we buy.”

The Obama administration issued a veto threat against the measure. In a statement of administration policy, the White House argued that Republicans are employing a double standard by demanding offsets for proposals like extending unemployment insurance but not for tax credits.

Another package to extend tax credits, known as “tax extenders,” will hit the House floor Friday morning. The bill would extend various tax breaks for small businesses, including the Section 179 credit that allows businesses to write off certain expenses.

The White House has also threatened to veto that measure.