Congress Extends Popular Tax Breaks

Congress extended three of President Bush's most popular tax cuts by lopsided margins Thursday night.

First, the House passed the $145 billion package of tax relief by a 339-65 vote; less than an hour later, the Senate approved the measure 92-3, the Associated Press reported.


Click Here

All 65 “no” votes in the House came from Democrats, who said the tax breaks should be funded by spending cuts or tax increases in other areas in light of a record $422 billion budget deficit this year that is going nowhere but up.

The tax breaks, which affect about 94 million taxpayers, would have expired at the end of this year had Congress taken no action. The legislation keeps the per child tax credit at $1,000, retains an expanded 10 percent income bracket and retains tax relief for married couples.

The tax package also extends relief from the alternative minimum tax for another year. The tax was designed to ensure that wealthy Americans pay their taxes, but more middle income taxpayers were being caught up in the unpopular tax.

Bush had rejected a deal offered by Democrats and some moderate Republicans that would have extended the tax cuts for one year and paid for them by closing various corporate tax loopholes.

In the end, the measure gained bipartisan support, and observers noted that lawmakers of either party would have a hard time voting against a tax cut this close to Election Day.

Minority Whip Steny Hoyer, D-Md., said the GOP refusal to pay for the tax cuts represented "fiscal child abuse" by saddling coming generations with massive debt.

“I wish we could pay for them, but this is a political problem and we have people up for re-election,” said Rep. Charles Rangel, D-N.Y., the senior Democrat on the House Ways and Means Committee. “If you have to explain that you voted for these tax cuts because they benefit the middle class and against them because of the deficit, you've got a problem.”

The Congressional Budget Office has estimated that debt will climb by $2.3 trillion over the next 10 years. Making all Bush's tax cuts permanent would cost an additional $1.9 trillion by the end of 2014.

You may like these other stories...

Some of your clients may get away to business conventions from time to time. It gives them a chance to rub shoulders with colleagues, catch up on the latest developments, and fine-tune their skills. And, when the meetings or...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...
Being an accountant doesn't mean you're giving investment advice to clients. However, at tax time, accountants often have to deal with the results of any investment advice clients obtained during the year—the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.