Senate Finance Chairman Max Baucus (D-Mont.) on Tuesday said action on a small business tax bill could occur soon and a fix for the estate tax may not be far behind it.
“I’d like to do a small business bill soon,” Baucus told The Hill, adding that talks on the estate tax will soon involve members.
“I’ll know more about the estate tax in a few more days,” he said. “It’s going on this week at the staff level and will on the [member] level later on this week.”
Committee and floor action on the small business bill might occur before the Memorial Day recess, an aide said.
Baucus said talks on the estate tax and the small business bill are happening simultaneously.
“On substance we are getting very close,” Baucus said about progress on the small business bill.
Senate staffers expect the legislation to cost between $10 billion and $15 billion over 10 years. The bill’s marquee provision will likely zero out capital gains for one year for small businesses registered as C corporations. A similar measure was in the House-passed small business bill.
Finance could markup its small business bill as early as next week, but that timeline could slip if negotiations on the estate tax falter. Still, a floor vote on the bill before the Memorial Day recess is likely.
Staffers said there would likely have to be an agreement on both the estate and small business bill for both measures to advance. That agreement would likely have to include Senate Majority Leader Harry Reid (D-Nev.) abiding by whatever Finance committee members agreed to.
On the estate tax, Finance members Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.) are leading the negotiations, staffers said.
The tax is currently repealed, but barring congressional action it returns next year to pre-2001 levels by socking estates worth more than $1 million with a tax that tops out at 55 percent.
The senators seek to create a less onerous tax. Kyl recently told The Hill the starting point for discussions on the tax was the 2009 law. He also said estates will likely have a choice in complying with the current repeal or the new bill once the legislation is enacted.
On extenders, House and Senate tax writers are weighing whether to add to the legislation Build America Bonds and extra state funding for educators. Offsets for the bill have also dominated discussions. Senate staffers hinted that modifying carried interest and no long allowing the splitting of foreign tax credits are top contenders. Combined, these measure could raise between $30 billion and $35 billion over 10 years.