A razor-thin 216-214 vote in the House of Representatives Wednesday clears the way for President Bush's Economic Stimulus package to find an even less friendly audience in the US Senate.
The desire to kick-start the economy as a result of slowdowns since September 11 is shared by all, but Democrats disagree with the approach and claim the package is back to "partisan politics at its best."
Highlights of the Economic Stimulus Package (costs are ten year estimates from the Joint Committee on Taxation):
- Give rebates of up to $300 for individuals, $500 for heads of households and $600 for married couples who did not receive checks earlier this year. Taxpayers who got less than the full amount in the first round will be eligible for the remainder. Cost: $13.7 billion.
- Cut the 27 percent income tax rate to 25 percent in 2002, instead of 2006 as under current law. Cost: $53.6 billion.
- Effectively reduce the long-term capital gains tax rate for most people from 20 percent to 18 percent. Increase deduction for capital losses from $3,000 to $4,000 in 2001 and $5,000 for 2002. Cost: $12.3 billion.
- Increase the alternative minimum tax exemption for individuals in 2002-2004. Cost: $6.3 billion.
- Permit 30 percent immediate expensing write-offs for purchase of capital assets over the next three years and make other expensing changes. Cost: $25.2 billion.
- Repeal corporate alternative minimum tax and refund AMT credits. Cost: $25 billion.
- Permanently extend tax break for financial companies with overseas income. Cost: $21.3 billion.
- Allow businesses to deduct net operating losses from taxes paid up to five years earlier for the next three years. Cost: $10.1 billion over the three-year period.
- Extend other expiring business tax breaks. Cost: $2.1 billion.
- Permit states to use existing block grants for unemployment benefits or health benefits. Cost: $12 billion.