Daily Tax Update - September 23, 2008

PAULSON URGES URGENT ACTION ON FINANCIAL RESCUE PLAN:  Today, Treasury Secretary Henry Paulson testified before the Senate Banking Committee on the Administration’s $700 billion financial rescue plan. Congressional leaders and the Administration are arguing over the specifics of the rescue plan, including Democrats' demand that executives at failing financial firms that receive the government help do not get "golden parachutes" after they leave.

  • Paulson said, “I appreciate that this is a difficult period for the American people. I also appreciate that Congressional leaders and the Administration are working closely together so that we can help the American people by quickly enacting a program to stabilize our financial system. We must do so in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families' financial well-being, the viability of businesses both small and large, and the very health of our economy.” Paulson continued, “We have proposed a program to remove troubled assets from the system. This troubled asset relief program has to be properly designed for immediate implementation and be sufficiently large to have maximum impact and restore market confidence. It must also protect the taxpayer to the maximum extent possible, and include provisions that ensure transparency and oversight while also ensuring the program can be implemented quickly and run effectively.” Paulson added, “Over these past days, it has become clear that there is bipartisan consensus for an urgent legislative solution. We need to build upon this spirit to enact this bill quickly and cleanly, and avoid slowing it down with other provisions that are unrelated or don't have broad support. This troubled asset purchase program on its own is the single most effective thing we can do to help homeowners, the American people and stimulate our economy.”
  • At today’s hearing, Senate Banking Committee Chairman Chris Dodd said, “It is not just our economy at risk but our constitution as well. . . The failure to protect consumers can cause the collapse of our largest financial institutions.”
  • A White House spokesman said today that President Bush is ”very, very confident” that the plan will be approved by Congress this week.
  • Paulson’s testimony can be accessed via:  http://www.treas.gov/press/releases/hp1153.htm 

ADMINISTRATION ISSUES POLICY STATEMENT SUPPORTING “PROMPT PASSAGE” OF TAX EXTENDERS / AMT BILL:  Today, the Bush Administration issued a Statement of Administration Policy (SAP) on legislation (H.R. 6049) pending in the Senate that would patch the alternative minimum tax, extend certain expiring tax provisions, and provide tax incentives for renewable energy. 

  • The SAP said, “The Administration supports prompt passage of the above-named Senate amendments to H.R. 6049.” The SAP also said that the Administration opposes the revenue provisions in the bill, but did not issue a veto threat against the bill. 

MISCELLANEOUS GUIDANCE RELEASED TODAY:

TAX BILLS INTRODUCED SEPTEMBER 22ND:
H.R.6983: To amend section 712 of the Employee Retirement Income Security Act of 1974, section 2705 of the Public Health Service Act, and section 9812 of the Internal Revenue Code of 1986 to require equity in the provision of mental health and substance-related disorder benefits under group health plans, and for other purposes.
Sponsor: Rep Kennedy, Patrick J. [RI-1] (introduced 9/22/2008)      Cosponsors (7)

H.R.6984: To amend title 49, United States Code, to extend authorizations for the airport improvement program, to amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, and for other purposes.
Sponsor: Rep Oberstar, James L. [MN-8] (introduced 9/22/2008)      Cosponsors (4)

S.3532: A bill to amend the Internal Revenue Code of 1986 to allow the Secretary of the Treasury to establish the standard mileage rate for use of a passenger automobile for purposes of the charitable contributions deduction and to exclude charitable mileage reimbursements from gross income.
Sponsor: Sen Cardin, Benjamin L. [MD] (introduced 9/22/2008)      Cosponsors (23)

S.3535: A bill to amend the Internal Revenue Code of 1986 to index certain assets for purposes of determining gain or loss.
Sponsor: Sen DeMint, Jim [SC] (introduced 9/22/2008)      Cosponsors (None)