Senators are hoping that popular tax provisions that expired last year will be the spoonful of sugar that recalcitrant Representatives need in order to swallow the revamped financial services bailout bill.
The measure that Senators will vote on tonight includes short-term continuation of several popular individual (and business) tax breaks, as well as another patch to keep folks from paying more because of the alternative minimum tax.
Although these proposals have had bipartisan support all year, they looked dead just a couple of days ago.
But as noted in my earlier blog about the legislative stare down, when politicians return to their states and districts to campaign, they would like to have something to show that they also can provide assistance to voters folks who aren’t directly connected to Wall Street.
Let’s hope that our lawmakers do indeed act, and act appropriately adult, this time.
The Senate has attached to the bailout measure its version of the House-passed
Title II: One-Year Extension of Temporary Provisions – Subtitle A:
Extensions Primarily Affecting Individuals – (Sec. 201) Extends through
2008:(1) the election to deduct state and local sales taxes in lieu of
state and local income taxes;(2) the tax deductions for qualified
tuition and related expenses and for certain expenses of elementary and
secondary school teachers;(3) the exemption from withholding for
interest-related and short-term capital gain dividends received from a
regulated investment company;(4) tax-free distributions from
individual retirement plans (IRAs) for individuals called or ordered to
active military duty and for charitable purposes; (5) the election to
include combat pay as earned income for purposes of the earned income
tax credit;(6) authority for use of qualified mortgage bonds to
finance residences for veterans; (7) special rules and definitions
relating to regulated investment companies; and(8) the tax exclusion
for amounts received under qualified group legal services plans.
CNN also notes that:
In addition, the bill includes relief from the
Alternative Minimum Tax, without which millions of Americans would have
to pay the so-called ‘income tax for the wealthy."The debate
over extending AMT relief is an annual political ritual. It enjoys
bipartisan support but deficit hawks on both sides of the aisle contend
the cost of providing that relief should be paid for. Others argue it
shouldn’t be paid for because the AMT was never intended to hit the
people the relief provisions would protect. Nevertheless, lawmakers
pass the measure every year or two.
And the New York Times reports:
The Senate
proposal would cost more than $100 billion and extend and expand many
individual and business tax breaks, including tax credits for the
production and use of renewable energy sources, like solar energy and
wind power.The bill would also extend the business tax credit for research
and development, expand the child tax credit, protect millions of
families from the alternative minimum tax and provide tax relief to
victims of recent floods, tornadoes and severe storms.
Senators Obama and McCain will be there for the expected passage of the bailout bill.
But don’t go making any tax or other financial plans until this is a done deal. House leaders thought they were going to approve a bailout bill earlier this week and we all know how that turned out!
Photo © 2006 Pittsburgh Post-Gazette
Bryant Arms
I wouldn’t be surprised if the recent overhaul of bankruptcy legislation was designed for this economic situation; it turns human debtors into indentured servant. And that is necessary for the following reason:
The ’sssssss’ we are noticing with this credit crunch is just the leak before the big burst. This credit bubble has been inflated by a logorithmic base 10 scale of dollar creation.
The practice of using 90% of ‘real’ wealth for lending that can then be invested and re-deposited for recycling again and again for more and more credit probably has the same effect of simply printing more money. The difference between those two ways of creating wealth is that creating money by credit inflation redistributes wealth for the benefit of financiers. And printed money is real; not fake.
This credit bubble burst should, then, be creating a shortage of money. And the cure may be as simple as the government printing more money. The only problem with that scheme is that there would not be another bubble to burst to correct for over-inflation. Printed dollars don’t evaporate away like the ones the financiers are trying to sell taxpayers now.
And that is why those who have engineered this bubble need those new draconian bankruptcy laws. Only wage earners can turn this fake money into real wealth. And that is why the Bush administration and other supporters of the great bailout plan are adamantly against giving bankruptcy judges the right to restructure debt according to who is most responsible for making bad loans.
Bryant Arms
goedkope verzekering
I also believe that tax provisions that expired last year will be the spoonful of sugar that recalcitrant Representatives need in order to swallow the revamped financial services bailout bill.