Senate Approves $100 Billion Tax Break Package
By JIM ABRAMS
By Jim Abrams
The Associated Press
The Senate passed a giant tax package Tuesday that saves more than 20 million taxpayers from the bite of the alternative minimum tax.
At a cost of more than $100 billion, the bill also nudges the nation toward greater use of alternative energy resources, renews popular tax breaks for businesses and individuals, and extends relief to disaster victims.
It includes a provision to ensure that mental health problems get the same level of insurance benefits as other medical treatment. The bill passed 93-2.
“The economy is struggling,” Senate Finance Committee Chairman Max Baucus, D-Mont., said. “At times like these, Americans need tax cuts that they’ve come to count on, that can help them get by.”
The tax bill is one of several major efforts to right the teetering economy in what could be the final week of this session of Congress. Lawmakers are trying to reach agreement on a $700 billion plan to bail out failing financial institutions, and Democrats are trying to put together a stimulus package to help non-wealthy Americans get through the economic downturn.
The House was expected to take up the tax package today.
The alternative minimum tax was enacted in 1969 to catch a few very rich tax dodgers. It was never adjusted for inflation and now Congress must act every year to ensure it doesn’t catch more people.
Without action, those affected could grow from about 4 million to 25 million, at an average tax increase of $2,000. The fix would cost $64 billion spread out over 10 years.
The first segment of the three-part tax bill was a $17 billion measure to spur investment and create jobs in the renewable energy industry. The energy legislation extends for eight years, through 2016, investment tax credits for the solar power industry and for homeowners who install solar and wind equipment.
Taxpayers can claim a credit of up to $7,500 for buying plug-in electric cars, and production credits are extended to wind, biomass and marine – wave and tide – facilities. There are incentives to use smart meters for more efficient home energy use.
breaking down the tax relief package
Key components and costs of the Senate package. Cost estimates are spread over 10 years:
n Extends for one or two years and expands production tax credits for wind, refined coal, biomass and marine renewables. $5.8 billion.
n Extends through 2016 the investment tax credit for solar energy. $1.9 billion.
n Extends through 2016 the credit for residential solar projects. $1.3 billion.
n Provides new tax credits for creation of advanced coal-fired electricity projects and certain coal gasification projects. $1.4 billion.
n Establishes a new credit for plug-in electric-drive vehicles. $758 million.
n Extends credit for energy-efficient improvements to existing homes. $837 million.
Alternative Minimum Tax
n Increases personal credits against the AMT, shielding more than 20 million taxpayers . $61.8 billion.
n Protects those exposed to the AMT because of incentive stock options. $2.3 billion.
Individual and business tax credits
n Extends until end of 2009 the research and development credit. $19 billion.
n Extends until end of 2009 the deduction for state and local general sales taxes. $3.3 billion.
n Extends until end of 2009 a tax deduction for higher education costs. $5.3 billion.
n Extends until end of 2009 a deduction for a teacher’s personal expenses. $410 million.
n Lowers the refundable threshold for the child tax credit for the 2008 tax year. $3.1 billion.
n Requires private insurance plans that offer mental health benefits to offer such benefits on a par with medical-surgical benefits. $3.9 billion.
n Provides tax relief to victims of natural disasters in the Midwest and elsewhere. $8.3 billion.
The Associated Press
how they voted
A “yes” vote is a vote to pass the bill.
John Warner, R, Yes Jim Webb, D, Yes
Elizabeth Dole, R, Yes Richard Burr, R, Yes
Originally published by BY JIM ABRAMS.
(c) 2008 Virginian – Pilot. Provided by ProQuest LLC. All rights Reserved.