Trucking didn't get its much-needed tax breaks in '99, but there's hope for 2000
Once the forlorn rallying cry of perennially disappointed Cubs fans, "Wait 'til next year" may become the new slogan of trucking executives and others hoping for tax relief.
Early in the season, tax relief was riding high in the House of Representatives, which passed a tax bill that contained cuts totaling $864 billion over 10 years. Then in September - cruelest of months for many a fan - President Clinton crushed tax cutters' pennant hopes with a veto. At the Congressional season's finale just before Thanksgiving, lawmakers could barely muster a lineup of minor league retreads - provisions that had been passed several times before but allowed to lapse before having their contracts extended shortly before, or even after, expiring.
The final bill had shrunk to about $20 billion by the time lawmakers gave up and went home for the year.
Left in the dugout was the trucking industry's top tax priority - acceleration of the deduction for drivers' meals. The percentage that is deductible will rise from 55% in 1999 to 60% in 2000, as previously enacted. But meals will not be 80% deductible until 2008 under current law. In addition, meals for other workers who travel remain only 50% deductible.
Furthermore, numerous other goodies that would have helped trucking - along with other taxpayers - didn't make it through the stretch drive, including faster phase-in of deductions for self-employed individuals' health insurance, liberalization and simplification of single- and multi-employer pension plan rules, and estate tax relief.
Will waiting 'til next year be enough? This time around the extenders will stay on the books until the end of 2001. That has both bad and good implications for carriers hoping for relief worthy of the name. The negative side is that extenders included provisions that were popular with both parties in Congress and with the President, making them an attractive package for attaching other, less secure provisions to.
On the positive side, the extenders were relatively expensive; that's the major reason they have never been enacted permanently. Indeed, just extending them through 2001 ate up all the revenue available for tax breaks in 1999. Any tax bill in 2000 will not have the revenue drain in its first year of having to feed the extenders first. Another plus is that Congress will have a chance to consider tax breaks that were not proposed in time to get into the 1999 bills.
Although the political atmosphere has been toxic to legislation this year, and conventional wisdom holds that the animosity is sure to get worse in a closely fought election year, all sides may decide that tax cuts before election time are in their best interest.
Furthermore, tax relief this year was impeded by skepticism that budget surpluses and continued strength in the economy were for real. The early indications for 2000 (and for fiscal 2001, the year beginning next October when most tax cuts would go into effect if passed) are that the economy will still be generating lots of revenue for politicians to "give back" to voters.
The bottom line: Never take a tax cut for granted. This year's supposedly must-pass didn't get enacted until weeks after Congress had planned to end the "season." That was true even though failure to pass it would have forced millions of middle-class Americans to spend hours trying to determine their liability for a fiendishly complex alternative minimum tax that Congress never intended them to pay. But never underestimate the desire of politicians to want an achievement they can tell voters about, such as a tax cut. And don't forget - even for Cubs fans, next year may be the charm.