Cleaning & Restoration Breaking News

House Passes Tax Cut Retaining Lower Rates

December 8, 2005
/ Print / Reprints /
ShareMore
/ Text Size+
WASHINGTON (AP) -- The House voted Thursday to preserve tax cuts for investors through the rest of the decade, safeguarding the centerpiece of the Republican tax agenda in a $56 billion package of tax breaks.

The bill, passed 234-197 along mostly party lines, would keep the 15 percent top tax rate for capital gains and dividends in place in 2009 and 2010, two years after their scheduled disappearance at the end of 2008.

Republicans said tax cuts championed by President Bush have revved up a sluggish economy, and Treasury Secretary John Snow praised the bill's passage, saying, "It would encourage investment and innovation -- the lifeblood of the American economy."

Democrats disagreed and said the tax cuts for investment income, and much of the GOP's economic agenda, exacerbated budget deficits and ignored average workers.

"The poor suffer. The rich benefit. The middle class is paying the bill," said House Minority Leader Nancy Pelosi, D-Calif.

The vote marked the fourth tax bill passed by the House in a week as lawmakers worked feverishly to clear out some unfinished tax work. Lawmakers haven't given up hope of completing some of those tax cuts this month, but it's unclear how much can be done before Congress disbands for the holidays.

The House vote for capital gains and dividend tax cuts sets up tricky negotiations with the Senate, where lawmakers could not muster enough support to insert the extension in their version of the bill. The Senate's GOP leaders vowed to make sure the investment tax breaks make it into the final legislation.

The 15 percent tax rate for investment income is currently scheduled to disappear at the end of 2008. If the reduction runs out, the top capital gains tax rate would be 20 percent and dividends would be taxed like ordinary income at rates up to 35 percent.

Lawmakers hope to at least complete work this month on a much smaller package of tax incentives to lure businesses and jobs back to the Gulf Coast after the region was lashed by hurricanes.

Also on the agenda is an effort to blunt the bite of the alternative minimum tax, which threatens to hit some 17 million individuals and families with higher taxes next year. The House and Senate have passed different versions of that bill, which may not be reconciled before a temporary solution runs out Dec. 31.

The bill passed in the House on Thursday does not only cut taxes on investment income. It also includes some changes popular with both Republicans and Democrats by preserving tax breaks that would otherwise expire in a few weeks.

Some of those evaporating tax breaks are federal deductions for state and local sales taxes, tuition and classroom supplies purchased by teachers. Businesses won extension of two major benefits, a tax credit for research and development and write-offs for investments by small businesses.

The House rejected an alternative tax package drafted by Democrats that would have omitted the tax breaks for investment income but addressed the alternative minimum tax. It also would have replaced $43 billion in government revenue lost to tax cuts by raising taxes on individuals earning more than $500,000 and couples earning more than $1 million.

Did you enjoy this article? Click here to subscribe to i Cleaning Specialist Magazine.

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

The 2014 Experience Conference and Exhibition

A look in photos at the 2014 Experience Conference and Exhibition, which was held from April 24-26 at the Embassy Suites Convention Center and Spa in Frisco, Texas.

1/27/15 2:00 pm EST

Grow Your Business and Improve Operations with New Payment Technology

Attend this free webinar to learn how new developments in payment technology can help you close more jobs, increase upselling opportunities and improve operations.

Podcasts

The winter slow season is a great time to pursue commercial cleaning accounts and stay busy. John "the Hitman" Braun solicited questions from thousands of cleaners across the country regarding their questions on commercial cleaning accounts and answers them in this episode of the show.
More Podcasts

ICS Cleaning Specialist Magazine

CoverImage

2014 Nov/Dec

The Nov/Dec ICS features content on how to get better meter readings, a roundtable on truckmount development, neighborhood marketing and more. Also included is the annual Buyer’s Guide and Directory.

Table Of Contents Subscribe

Janitorial Work

In addition to residential and commercial carpet cleaning, do you do any janitorial work on the side?
View Results Poll Archive

THE ICS STORE

FinalCover.gif
The Carpet Cleaner's Book of Unlimited Success! (ebook)

Don’t worry about the recession or about your competition.  Now you can be the owner of over 400 ways for carpet cleaning professionals to make more money and get more jobs!

More Products

ICS DIRECTORY AND BUYING GUIDE

Director_Buyer.jpgThe premier resource and reference guide for the cleaning and restoration industries.

Click here to view

STAY CONNECTED

facebook_40.png twitter_40px.png youtube_40px.pngcrc logo

TRUCKMOUNT EQUIPMENT AND ACCESSORIES GUIDE

Truckmount.jpgEquipment listings and specifications from the leading industry manufacturers.

Click here to view