Today the Senate voted (60-37) to adopt S. Amdt. 4344, proposed by Reid, to the extenders bill (HR 4213) that will esxtend the closing date deadline for first-time home buyers to claim the home buyer tax credit by 90 days. The payfor is the elimination of the deduction for punitive damages, with the corresponding requirement that a recipient of a punitive damage award include it in income.
One of the good things about the pay-for rule is that the provisions used are often sound tax policy. It seems foolish to call something "punitive" damages and then let the corporation deduct them to lower its tax bill. Like the carried interest provision (although it appears it will be watered down to a half measure), these revenue provisions are taking care of problems in the Code that should have been acted on independently. But better as pay-fors than not at all. Especially where the measure being paid-for is a temporary one, and the needed change is made permanently. (Somebody else made that point in a blog I read recently, but I can't recall offhand and didn't save the link. Hat Tip anyway.
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