Daily Tax Update - November 18, 2008

SENATE MAJORITY LEADER REID INTRODUCES $100 BILLION STIMULUS BILL:  Yesterday afternoon, Senate Majority Leader Harry Reid (D-NV) introduced a $100.3 billion economic stimulus package that includes a tax credit for purchasers of new cars. Reid said, “Families across the country facing rising prices and disappearing jobs cannot wait until January for help making ends meet, and they shouldn't have to.” Reid may try to bring the bill up for a vote on Wednesday. If a cloture vote on the broad stimulus package fails, Reid will likely bring up a smaller stimulus bill to aid the auto industry and extend unemployment benefits. 

• A provision was added to the bill that would create an “above the line” tax deduction for interest payments on car loans and state sales/excise taxes for new cars purchased between November 12, 2008 and December 31, 2009.
• According to Reid, his plan would:  
• “Extend unemployment insurance for those who are out of work;
• Provide food stamps to help more struggling families make ends meet;
• Provide state fiscal relief to prevent states from being forced to cut services and raise taxes;
• And provide aid to the ailing US auto industry. 
• The Treasury Department has acknowledged that they could provide the auto industry with the temporary assistance they need to remain solvent–all it would take is one pen stroke. The Federal Reserve also has the authority to provide funds.” 
• Reid added, “Thus far, neither the Treasury Department nor the Fed has done so–but this week, the Congress can. If we move forward, we can protect and create American jobs, help working families and prevent our economy from falling even further into recession. In the event there are objections to passing this important legislation, we will have the opportunity to vote on a second bill that consists solely of unemployment insurance and relief for the auto industry and its work force. So I ask my colleagues to show the American people that in the face of tremendous economic pain and uncertainty, we will not wait until January.”
• House leaders are waiting to see what happens in the Senate. Today, House Majority Leader Steny Hoyer said that the House could come back into session the week of December 8^th if action on an auto bailout bill does not occur this week. Hoyer said, “We're going to be here in December, not necessarily in session.” Hoyer also said the Democrats plan to hold an economic conference that week.

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