| DT Online Home |
Site Search | Tax
News & Views |Tax Week in ReviewMonday, May 21, 2001 Deloitte & Touche OnLine Jump to any article by clicking on
the headline link. Senate Begins Debate on $1.35 Trillion Tax Bill The full Senate began debate May 17 on the 11-year, $1.35 trillion tax cut package passed by the Senate Finance Committee earlier in the week. The proposal would implement the vast majority of President Bush's proposed tax cuts, although the relief is tilted more toward the middle and lower classes. Like the president's plan, the Finance Committee package would repeal the estate tax, provide marriage penalty relief, and cut marginal income tax rates. It also goes beyond the president's tax cut agenda in several areas, including pensions and education savings. In addition, the proposal includes $100
billion in tax measures to stimulate the economy in fiscal years 2001 and
2002. (For more
on the specific provisions in the Finance Committee bill, see Tax News
& Views, May 17, 2001.) "The bill that is before us will be the largest tax cut given to the American people in the last 20 years," said Finance Committee Chairman Charles Grassley, R-Iowa. "In the process of doing this, we are going to take a considerable and substantial sting out of the tax bite. These tax cuts would not be as substantial as what we have now if it weren't for the president. There was a necessary bipartisan compromise on a level somewhat less than the president proposed, but compromise is always necessary in Congress, especially when it is so evenly divided as it is now 50-50 in the Senate." Managers' Amendment Approved -- At press time, the Senate had approved a managers' amendment that would accelerate to 2005 the implementation of the marriage penalty relief provisions and eliminate a provision that would have reinstated the tax cuts in the Finance Committee proposal on October 1, 2011. The tax relief measures in the Finance Committee proposal are scheduled to sunset on September 30, 2001. This means that the various tax cuts will disappear beginning October 1, 2011, and the Congress in session at that time will have to determine how to deal with tax provisions that have reemerged. Under the rules of the Senate, reconciliation bills can modify tax laws for the period defined under the bill, but not beyond. R&D Amendment Expected -- Finance Committee member Orrin Hatch, R-Utah, is expected to offer an amendment on May 21 to permanently extend the research and development (R&D) tax credit. Senate Minority Leader Tom Daschle, D-S.D., said he expected the amendment to be approved by a unanimous vote. Hatch and Daschle offered separate amendments to make the R&D credit permanent during the Finance Committee markup on May 15. The amendments had bipartisan committee support, but were withdrawn at Grassley's behest. Democratic Alternative Likely -- Critics argued the bill would give huge tax breaks to those in the highest tax brackets while doing little for middle- and lower-income taxpayers. Daschle has said he plans to offer a 10-year, $900 billion Democratic alternative tax bill that would include a $600 per couple ($300 per individual) one-time tax refund, estate tax reform, a partially refundable child tax credit, a new 10 percent income tax bracket, and marriage penalty relief. Daschle has signaled that he also will offer an amendment that would provide a cut in the 15 percent tax bracket. Timetable -- A Democratic Finance Committee staffer told Deloitte & Touche May 17 that the Senate likely will conclude debate on May 21, with votes on amendments late that night or early on May 22. A Republican House Ways and Means staffer has told Deloitte & Touche that preconference meetings (informal, closed-door sessions between House and Senate negotiators to hash out differences) will take place over the weekend of May 19, followed by a formal conference on May 22 and May 23. Final votes on the conference report are likely by the end of the week. Hill GOP leaders continue to hope to have the tax reconciliation bill to the president's desk for his signature by the Memorial Day recess, which begins May 25. "This is an ambitious schedule, so we'll see if it sticks," the staffer said.
|
|
Bush Energy Plan Includes Tax Incentives for Alternative Fuels, Clean-Power Technology President Bush on May 17 announced tax and other measures to address the country's energy shortages and high energy prices. The plan includes tax incentives for alternative fuels and the development of clean-power technology, tax credits to encourage the purchase of fuel cell vehicles, and assorted conservation and production measures. Based on proposals from the National Energy Policy Development Group chaired by Vice President Dick Cheney, the White House plan would --
"The plan I lay out for the nation harnesses the power of modern markets," Bush said. Citing the plan's conservation and other initiatives, the president promised to "expand the diversity of our energy supply." Prospects -- Although some members of Congress support the president's plan, it is uncertain if it will be enacted any time soon. |
|
| Home | Personal Finance Advisor | Growth Company Services | Tax News & Views | Tax News & Views is produced by the
Legislative & Regulatory Services Group at Deloitte & Touche LLP.
|
