WASHINGTON — Tax breaks for victims of natural disasters and credits for developers renovating historic buildings made it into the final GOP tax-cut bill released late Friday afternoon.
Victims of the 2016 Louisiana floods would be able to refile their tax returns and write off much more of their damages under the changes. Early withdrawal penalties for those tapping their retirement savings to rebuild would also be waived.
The final version of the tax bill, hammered out by Republicans this week in a series of closed-door meetings, is expected to come to a vote early next week. GOP leaders on Capitol Hill appeared confident they had the votes to send the package to President Donald Trump's desk before heading home for Christmas.
Historic tax credits, widely used by developers in New Orleans and across Louisiana, will also survive under the tax-code overhaul. Initial drafts of the bill in both the House and Senate would have axed the credits, alarming Louisiana real-estate developers and local civic leaders.
The disaster tax relief provisions and historic tax credits were inserted into the bill by Sen. Bill Cassidy, R-Louisiana, during Senate debate on the bill.
Congressional sources said the tax breaks for victims of natural disasters were the most hotly contested provisions. That's because they carry a price tag of roughly $4 billion over the next decade, money some GOP lawmakers hoped to put toward other priorities in the bill.
But Louisiana's delegation — including U.S. Rep. Steve Scalise, R-Jefferson, who's the third-ranking Republican in the House — ultimately succeeding in pushing the provisions.
Similar tax breaks for victims of other disasters, including 2017 hurricanes in Texas and Florida, have orovided relief under more targeted legislation. Previous efforts to give that kind of relief to those hit by the 2016 Louisiana floods, however, had foundered on Capitol Hill.
A potential boost in the amount of federal offshore drilling revenue headed to Louisiana — worth as much as $100 million per year for the state in 2020 and 2021 — is also included in the bill.
Cassidy and Scalise announced those changes yesterday, saying they'd secured commitments to boost oil revenue-sharing in the bill early on in negotiations.
The overall tax bill is expected to pass despite unified opposition from Democrats.
Congressional scorekeepers have projected that the tax cuts will increase the federal deficit by nearly $1.5 trillion over the next decade. Republicans in Congress have largely disputed that, claiming additional revenue generated by increased economic growth will offset drops in tax rates.
No independent analysis of any earlier version of the bill has projected that to be the case, however, though several have projected increased growth under the bill.