October 2, 2008
Senate Plan Raises FDIC Limits, Extends Tax Breaks
By Sue Kirchhoff
The Senate on Wednesday voted in favor of the same $700 billion financial rescue legislation that failed in the House by a stunning 228-205 vote on Monday, with one significant change.
Currently, a married couple is insured for $100,000 in an individual account and an additional $200,000 in a joint account, for a total of $300,000 in insured deposits. The legislation would allow each spouse to be insured for up to $250,000 in an individual account and $500,000 in a joint account, for a total of $1 million.
The measure was attached to a package of popular tax breaks that were already moving through Congress on a separate track and which would cost about $110 billion from 2009 to 2018. The so-called tax-extenders measure includes provisions designed to blunt the impact of the Alternative Minimum Tax, a parallel tax system that eliminates many popular deductions and credits. The AMT was originally targeted at the very rich but has hit upper-middle-class and some middle-class taxpayers.
The tax bill further extends popular tax breaks for wind, solar and other renewable energy and would create a program requiring insurers to offer mental health benefits on par with medical-surgical services. The so-called mental health parity provisions, which have long been a cause of Sen. Pete Domenici, R-N.M., have broad support in Congress.
Among the Senate plan's provisions:
*Increases personal tax exemptions under the AMT and shields employee incentive stock options from the AMT.
*Extends a tax break that lets homeowners who don't itemize deduct up to $500 in property taxes a year, or $1,000 if they're married and file jointly.
*Extends a popular tax deduction for higher-education expenses and a $250 deduction for teachers who use their own money to buy school supplies.
*Extends a longstanding business research-and-development tax credit.
*Extends a deduction for state and local sales taxes.
*Expands a tax credit to families with children under 17.
*Extends 30% investment tax credit for solar energy and fuel-cell property.
*Extends an existing tax credit for solar energy and expands tax relief for solar electric investments, both through 2016.
*Extends for one year an existing tax credit for producing electricity from wind. The tax credit for other renewable energy sources would be extended for two years.
Contributing: Sandra Block, Paul Davidson (c) Copyright 2008 USA TODAY, a division of Gannett Co. Inc. <>>