Posted on 05/11/2006 7:54:43 AM PDT by SJackson
WASHINGTON — A bill awarding tax relief to investors and 15 million taxpayers facing the alternative minimum tax passed the House on Wednesday, giving President Bush and his GOP allies on Capitol Hill a long-sought election year victory. The bill, providing tax cuts worth $70 billion over five years, passed on a 244-185 vote. The Senate was expected to clear the bill for Bush's signature today. The legislation provides a two-year extension of the reduced 15 percent tax rate for capital gains and dividends, currently set to expire at the end of 2008. It also would extend, for this year, recent changes to the alternative minimum tax — originally aimed at making sure the wealthy pay at least some taxes — to prevent it from hitting more upper-middle-income families. The debate was divided starkly along partisan lines, with Republicans crediting the tax cuts, first enacted in 2003, with a surging economy, millions of new jobs and booming tax revenues. Democrats countered that the deficit-financed tax cuts are tilted in favor of wealthy investors and that the economic benefits are not as great as advertised. "Our pro-growth policies have helped the economy create more than 5.2 million jobs since August of 2003," Bush said in a statement. "By extending key capital gains and dividends tax relief, the House has taken an important step to continue to help hardworking Americans and to keep our economy strong and growing." Critics, including most Democrats, attacked the tax-rate reductions on dividends and capital gains as being skewed in favor of the rich. They noted that it was the second half of a GOP budget package that began with $39 billion in benefit cuts over five years, many of which came from programs for the poor such as Medicaid. Democrats also cited a joint study by the Urban Institute and the Brookings Institution that shows taxpayers with incomes greater than $1 million per year winning tax cuts of $42,000 under the bill, while families with incomes of $50,000 a year would average a $46 tax cut. Just 15 Democrats joined all but two Republicans in voting for the bill. Passage of the bill is the first step of a two-track strategy for advancing the GOP's election-year tax-cut agenda. The first, the $70 billion tax bill focused on investor tax breaks and alternative minimum tax relief, can advance under special rules blocking Senate Democrats from filibustering it to death. Another bill, which contains up to $30 billion in tax breaks backed by both Republicans and Democrats, will advance later. Those breaks include preserving tax deductions for state and local sales taxes, a tuition tax deduction, a tax break for teachers who buy their own school supplies, and a business research and development tax credit.
WASHINGTON — A bill awarding tax relief to investors and 15 million taxpayers facing the alternative minimum tax passed the House on Wednesday, giving President Bush and his GOP allies on Capitol Hill a long-sought election year victory.
The bill, providing tax cuts worth $70 billion over five years, passed on a 244-185 vote. The Senate was expected to clear the bill for Bush's signature today.
The legislation provides a two-year extension of the reduced 15 percent tax rate for capital gains and dividends, currently set to expire at the end of 2008. It also would extend, for this year, recent changes to the alternative minimum tax — originally aimed at making sure the wealthy pay at least some taxes — to prevent it from hitting more upper-middle-income families.
The debate was divided starkly along partisan lines, with Republicans crediting the tax cuts, first enacted in 2003, with a surging economy, millions of new jobs and booming tax revenues. Democrats countered that the deficit-financed tax cuts are tilted in favor of wealthy investors and that the economic benefits are not as great as advertised.
"Our pro-growth policies have helped the economy create more than 5.2 million jobs since August of 2003," Bush said in a statement. "By extending key capital gains and dividends tax relief, the House has taken an important step to continue to help hardworking Americans and to keep our economy strong and growing."
Critics, including most Democrats, attacked the tax-rate reductions on dividends and capital gains as being skewed in favor of the rich. They noted that it was the second half of a GOP budget package that began with $39 billion in benefit cuts over five years, many of which came from programs for the poor such as Medicaid.
Democrats also cited a joint study by the Urban Institute and the Brookings Institution that shows taxpayers with incomes greater than $1 million per year winning tax cuts of $42,000 under the bill, while families with incomes of $50,000 a year would average a $46 tax cut. Just 15 Democrats joined all but two Republicans in voting for the bill.
Passage of the bill is the first step of a two-track strategy for advancing the GOP's election-year tax-cut agenda.
The first, the $70 billion tax bill focused on investor tax breaks and alternative minimum tax relief, can advance under special rules blocking Senate Democrats from filibustering it to death. Another bill, which contains up to $30 billion in tax breaks backed by both Republicans and Democrats, will advance later.
Those breaks include preserving tax deductions for state and local sales taxes, a tuition tax deduction, a tax break for teachers who buy their own school supplies, and a business research and development tax credit.
"Critics, including most Democrats, attacked the tax-rate reductions on dividends and capital gains as being skewed in favor of the rich. "
***
Same old looney left socialist mantra. You'd think they'd come up with something new. Guess not.
No doubt to be reported in the drive-by-media as just tax cuts for the rich.
Grrrr...
Profiles in Class Warfare: Snow Flashes $20 Bill to Demagogue Tax Cut
Wow, can't we ever just applaud the President for a good job around here, ever?
Too little, too short.
The bigger agenda right now is to drive the GOP rightward and that means beating up the status quo and that's Bush. I'm sure he knows this.
I agree. Great job of President Bush and GOP to get this thru in order to extend the economic boom, a boom with many disgruntled GOP'ers will not credit President Bush for.
I'M SO SICK OF LIBERAL CONSERVATIVE RINOS... OH WAIT... NEVERMIND!
LLS
I see...it's stupid to provide a 15% dividend tax which is largely responsible for the low unemployment rate. Whatever.
It's fine to criticize him on That Issue. Oddly enough, I WOULD be, but the overwhelming tidal wave of overheated rhetoric about it makes that unnecessary.
But man, these people are in such denial that Bush is a conservative at all that they shrug when he does something even they agree is a Good Thing.
Because the Dems hoodwinked them. Forget SS or Medicare cuts, but the Income and Estate Tax cuts weren't permanent, they sunset in 2011. Making them a major issue in 2008 and 2010. The capital gains provision was scheduled to sunset in 2009, so it had to be addressed earlier. Personally I think the issue should have been making the cuts permanent. And if that meant Republican's running on lower taxes and Dems whining about cuts for the rich this year, fine, that's worked to Republican advantage.
Excellent point. Of course, we will be bashed and trashed for even asking the question. Not that I think the Dems would cut those taxes but why don't the Republicans do it? Those are the taxes that most middle-income people pay.
I'll applaud the House, though the bill is a stop gap. The President hasn't invested much in promoting tax cuts (as in making them permanent) the last few years. This should have been a priority, it's a winning issue.
The AMT cut is an income tax cut. BTW, this cut will further promote job growth and investment. Do you have a problem with that or is it necessary to find a negative in the midst of a positive story.
On the contrary, I've heard him mention it quite a bit.
Seems like everyone has their pet issue which they believe Pres. Bush should be reiterating EVERY minute of every day.
However, I'm disappointed there is no detail about it in the article. I'd like some specifics.
Ping
The 15% dividend rate does very little except to encourage corporations to pay shareholders more dividends instead of reinvesting profits into the corporation.
It does very little to help employment.
I've seen very little pressure to make the 2001-03 cuts permanent, other than capital gains which had an earlier expiration. If he's been pushing it, it's too bad the House didn't listen, this was a perfect time to pass it.
It's not a reform, it's a one year (2006 tax year) extension of the AMT minimum income limits (62,550 married, 42,500 single). They were scheduled to drop back to 2000 levels. Essentially 2006 will be the same as 2005. 2007 is in the future.
Not bad for a Lame Duck!
Pray for W and Our Freedom Fighters
The dividend cut is not stupid; it may appear that way to those who don't own equities, but many Americans do, these days.
So what else is new?
This is some of the info I was looking for. Thanks.
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