Senate Passes Tax Extenders, Path Unclear in House
September 24, 2008
Earlier this week, the Senate passed H.R. 6049, the Tax Extenders and Alternative Minimum Tax Relief Act of 2008. The bill extends several expired tax provisions, expand incentives for alternative energy, and provide one year of relief to millions of taxpayers currently subject to the alternative minimum tax (AMT).
Approved by a 93 to 2 vote, the $150 billion package renews dozens of tax benefits that expired at end of 2007, including the IRA charitable rollover, the above-the-line tuition deduction, and the R&D tax credit. The bill extends those provisions for two years, through December 31, 2009. Also provided in the bill is $17 billion in tax incentives for those that invest in and use renewable energy.
About $42 billion of the bill's $150 billion price tag is offset by revenue raisers, including:
- a curtailment of an offshore deferred-compensation technique often used by hedge fund executives
- a requirement that brokers to tell the IRS how much their customers pay for securities
- a proposal to freeze the domestic-manufacturing tax deduction for oil and gas companies.
A measure to simplify the tax treatment of employer-provided cellular phones was not included in the Senate bill, but there is still a possibility that it could appear in the House version.
Notwithstanding its opposition to several provisions included in the Senate version of H.R. 6049, earlier this week the Bush Administration issued a Statement of Administration Policy supporting prompt passage of the Senate package.
For months, House leaders have indicated that they would oppose any legislation that is not fully offset in keeping with the pay-as-you-go budget rules. With pressure mounting for the House to help move the tax and energy measure forward, it is anticipated that tax writers may break the Senate bill into smaller pieces and that further negotiation between the two bodies will take place.
Senate Finance Committee press release and summary of the bill.
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