Daily Tax Update - January 30, 2008

FINANCE COMMITTEE MARKS UP ECONOMIC STIMULUS BILL:  The Senate Finance Committee mark up of its economic stimulus bill is still ongoing. Committee Chairman Max Baucus (D-MT) has offered a $161 billion Chairman’s Mark which adds $10 billion in extended unemployment benefits. Baucus' bill would also reduce the rebates to $500 for individuals and $1,000 for joint filers (the $300 child tax credit would remain unchanged), and would eliminate the cap that would limit them to lower- and middle-income taxpayers. The bill would also suspend half of the bonus depreciation deduction for one year and add a two-year $14.4 billion net operating loss carryback extension for 2008.

  • Numerous amendments are expected to be offered at today’s mark up. Today, ranking member Charles Grassley (R-IA) said, “I think we're going to be able to resist all amendments that [Chairman Max] Baucus and I agree should be resisted. There might be some changes made but they'll be things that he and I agree to.” Grassley added, “We must not load up this stimulus package or else it is likely to sink.  Christmas is over. Let’s not load this up like a Christmas tree.”
  • Today, Senate Budget Chairman Conrad (D-ND) voiced concern over the provision in the Chairman’s Mark which would provide $500-per-person tax rebates ($1,000 for joint filers) to upper-income taxpayers. Conrad said, “I  think when we take the cap off and start sending $1,000 checks to Bill Gates, Barry Bonds and Donald Trump. . .then I think we've lost our way.” Grassley said, “Where is the magic number for cutting people off. What magic is $75,000? $200,000? $500,000? If you pay income taxes, you ought to get a reduction. That's it.”
  • Yesterday, the President again cautioned the Senate against adding amendments to the House bill. The President said, “The temptation is going to be for the Senate to load it up. My concern is that we need to get this bill out of the Senate and on my desk so the checks can get in the hands of our consumers, and our businesses can be assured of the incentives necessary to make investments.”
  • A description of the Chairman’s Mark can be accessed via: http://www.senate.gov/~finance/sitepages/leg/LEG%202008/013008%20FINAL%20%20SFC%20Markup%20Doc%20%201-28%20(2).pdf

TAX BILLS INTRODUCED JANUARY 29TH:
H.R.5160: To amend the Internal Revenue Code of 1986 to encourage retirement savings by modifying requirements with respect to employer-established IRAs, and for other purposes.
Sponsor: Rep Kind, Ron [WI-3] (introduced 1/29/2008)      Cosponsors (1)

H.R.5169: To amend the Internal Revenue Code of 1986 to reduce marginal income tax rates on corporations.
Sponsor: Rep Cantor, Eric [VA-7] (introduced 1/29/2008)      Cosponsors (None)

H.R.5172: To amend the Internal Revenue Code of 1986 to provide recovery rebates to certain individuals receiving social security benefits.
Sponsor: Rep Donnelly, Joe [IN-2] (introduced 1/29/2008)      Cosponsors (3)

H.R.5175: To amend the Internal Revenue Code of 1986 to repeal the withholding of income and social security taxes.
Sponsor: Rep Foxx, Virginia [NC-5] (introduced 1/29/2008)      Cosponsors (17)

S.2566: A bill to amend the Internal Revenue Code of 1986 to provide a Federal income tax credit for certain home purchases.
Sponsor: Sen Isakson, Johnny [GA] (introduced 1/29/2008)      Cosponsors (4)

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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