Daily Tax Update - May 7, 2008

ADMINISTRATION THREATENS VETO OF HOUSING STIMULUS BILL: Today, the White House issued a Statement of Administration Policy opposing several provisions in the housing stimulus bill to be considered by the House this week. The Administration’s statement said that the bill contains a “largely ineffective homeowner tax credit.” The statement also said that the Administration opposes “one of the bill’s revenue offsets that would further delay a provision permitting US corporations to elect a favorable method of allocating interest expense for purposes of using foreign tax credits (commonly known as worldwide interest allocation.)”  

• Today, the President said, “We are committed to a good housing bill that will help folks stay in their house, as opposed to a housing bill that will reward speculators and lenders.”
• The Statement of Administration Policy can be accessed via:   http://www.whitehouse.gov/omb/legislative/sap/110-2/saphr3221-r.pdf

RANGEL SAYS TAX EXTENDERS COULD BE MARKED UP NEXT WEEK:  House Ways and Means Committee Chairman Charles Rangel said that the Committee could take up a one-year, fully offset extension of expired and expiring temporary tax provisions as early as next week. The one-year package is expected to include all measures that expired at the end of 2007, including the research and development tax credit, the deduction of state and local general sales tax, and the above-the-line deduction for qualified tuition and related expenses, as well as the measures that are set to expire at the end of the 2008, including the active financing exemption under Subpart F.  Rangel has not released the offsets to pay for the extenders but said, “some are difficult, some are not, some are easy.”

TAX BILL INTRODUCED MAY 6TH:
H.R.5974: To amend the Internal Revenue Code of 1986 to provide a Federal income tax credit for certain home purchases.
Sponsor: Rep Terry, Lee [NE-2] (introduced 5/6/2008)      Cosponsors (7)

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