Posted on 12/08/2005 2:12:05 PM PST by LdSentinal
WASHINGTON (MarketWatch) - House Republicans prevailed Thursday in passing legislation that extends around $56 billion worth of tax cuts through 2010, including lower rates on corporate dividends and capital gains set to otherwise expire in 2008. The House passed the bill on a 234-197 vote, delivering a legislative victory to President Bush, who contends the 15% rate on dividends and capital gains first enacted in 2003 have been crucial to the economic recovery.
"Tax relief for dividends and capital gains has contributed directly to the strengthening of the nation's economy, which has created over 4 million new jobs since the enactment of the relief, and the stronger economy has helped produce substantial additional revenues that have reduced the deficit," the White House budget office said in a statement.
The extension of the cuts, however, is not a done deal, as lawmakers now have to resolve differences with Senate legislation which does not include the investor tax breaks due to resistance from GOP fiscal hawks.
House Democrats charged that the bill disproportionately benefits the nation's wealthiest, and would contribute to rising deficits in the future.
They unsuccessfully sought to substitute a provision that would have provided around $45 billion in tax cuts through 2010, omitting the investor-oriented tax break in favor of a provision that would shield taxpayers from the alternative minimum tax, or AMT, which threatens to hit millions of middle-class taxpayers next year.
"The Democratic substitute is -- morally and fiscally -- far and away the better choice, particularly if you want to balance the budget and eradicate the deficit," said Rep. John Spratt, D-S.C.
The Democrat's substitute plan was defeated 239-192.
The House overwhelmingly passed a separate, one-year AMT "patch," on Wednesday, but Democrats contend the measure's fate is uncertain in the Senate. The tax bill passed Thursday is part of a budget process known as "reconciliation," which shields legislation from filibusters in the Senate. The AMT patch passed Thursday has no such protection.
The Senate's version of the reconciliation bill doesn't include the extension of the lower capital gains and dividend rate. Republican leaders were unable to overcome resistance by GOP fiscal hawks such as Maine's Olympia Snowe, who argued it was premature to extend a tax cut not due to expire for another two years.
The Senate's version instead includes an AMT fix. Differences between the House and Senate versions of the reconciliation bill must be ironed out by negotiators. A final package is unlikely to be worked out before lawmakers leave for the year, making it likely to be among the first items considered when lawmakers return in 2006.
Excellent.
Keep 'em comin!!
The rinos in the senate will gut it.
I was about to post something along those lines. The chances of the gutless Senate are slim to none. Time for "BIG TIME" arm twisting.
Finally! Congress does something we sent them there to do. Good job boys.
Alright! Less taxes on my capital gains! SWOOSH!
Anyone hear if the tax reduction on the foreign profits of US Corps will be extended another year? I haven't kept up these past few days.
Cool.
I'd like to see massive cuts in SPENDING as well
If the objective is to "starve the beast" to achieve cuts the House should have the courage to cut the programs at the same time as taxes are cut. As it is this is irresponsible.
Ross Perot is looking like a genius at this point. His crazy aunt in the attic is screaming bloody murder.
They passed a $60 million "tax cut" in the senate already. It's going to a joint House-Senate committee.
There is nothing "excellent" about this.
With the White House, the House and the Senate in Republican hands, with the voters giving Bush an overwhelmig victory, and with Bush's approaval rating near 90% at one time, the time was ripe to push through the national sales tax (thus, TOTAL elimination of taxes on cap gains and dividends, among other benefits).
Just another sign of a flaccid and impotent Administration that can't find a way to get anything done of lasting and major importance.
What makes you think the majority of Republicans or conservatives for that matter even support your new sales tax? Adding another bureaucratic layer of taxes is not always a good idea even if it is supported by you.
This tax cut is nothing - it'll get swallowed up by runaway spending on entitlement programs and other unconstitutional parts of government. Plus it's riddling the tax code even more.
Oooooooooh WOW, a $60 million tax cut. That comes out to about 70 cents per taxpayer?
When Bush had a 90% approval rating, the Senate was in Democratic hands.
The HOUSE and Senate were almost always in Democratic hands when Reagan was President, yet Reagan handled budgets far, FAR better than lil Bush.
You mean when Reagan signed in tax increases? And the Senate was in Republican hands for 6 out of 8 years of Reagan's presidency.
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