[RE-wrenches] bill extends tax credits for renewable energy such as solar power
Joel Davidson
joel.davidson at sbcglobal.net
Tue Sep 16 16:21:49 PDT 2008
Senate reaches agreement on tax relief package
9/16/2008, 6:51 p.m. CDT
By JIM ABRAMS
The Associated Press
WASHINGTON (AP) - Senate leaders said Tuesday that they had broken a
months-long impasse over a tax break package that would bring billions of
dollars in relief to individual and business taxpayers, developers of clean
energy resources and people threatened by the alternative minimum tax.
Senate Finance Committee Chairman Max Baucus, D-Mont., and his Republican
counterpart on the panel, Charles Grassley of Iowa, said the package could
reach the Senate floor this week. The tax package is one of the last major
issues that Congress must address in the last weeks before its scheduled
adjournment for the year.
The agreement includes some $17 billion in clean energy tax incentives and
provides for a fix, at an estimated cost of $64 billion over 10 years, to
shield more than 20 million taxpayers in danger of getting hit by the
alternative The AMT was enacted in 1969 to catch a small number of very rich
tax dodgers, but was never adjusted for inflation and hits more
upper-middle-level income people every year unless Congress acts to protect
them.
The Baucus-Grassley measure would also extend numerous targeted tax breaks
that expired at the end of last year or are set to die out at the end of
this year. Those include tax breaks for college tuition, state and local
sales taxes and research and development for U.S. businesses.
"Protecting families from the alternative minimum tax and extending expiring
tax cuts will put real money in the pockets of struggling families, and
enable entrepreneurs to invest and innovate," Baucus said.
Grassley noted that the agreement also included $7 billion in tax relief to
help Iowa and other Midwestern states recover from floods and tornadoes that
hit the area this summer.
The compromise had the blessing of Senate Majority Leader Harry Reid,
D-Nev., and Republican leader Mitch McConnell, R-Ky. ""It's always a little
bit dangerous to predict optimistic outcomes around here, but let's do it
anyway." He said he and Reid have basically agreed to the package extending
tax breaks that have expired or are about to expire.
Reid and the Democrats have made several attempts this year to advance a tax
relief package, but have been thwarted by Republicans objecting to
Democratic proposals to offset the costs of the relief. Complicating the
issue is that House Democrats have insisted that they will reject any
legislation to renew expiring tax bills that adds to the deficit.
Baucus and Grassley said the clean energy tax incentives would be paid for
with such measures as freezing the tax deduction for the domestic
manufacturing activities of American oil and gas companies and tightening
the rules by which oil and gas companies pay taxes on income earned
overseas.
The said the extension of expiring family and business tax cuts, which
include expansion of the child tax credit and legislation providing parity
for mental health treatment, would be partially offset by closing loopholes
by which hedge fund managers use offshore corporations to defer taxes on
compensation received for investment services.
The AMT fix would not be paid for.
House Majority leader Steny Hoyer, D-Md., asked Tuesday about the Senate
actions, said it was "better to do something half right than not to do it at
all." He said the House would move with dispatch on the paid-for energy tax
breaks. "The part that is not paid for, we'll look at," he said.
Sen. Maria Cantwell, D-Wash., who led negotiations on the energy tax credits
with Sen. John Ensign, R-Nev., said the tax credits could mean tens of
thousands of jobs.
"This is a major step forward to help get us off our dependence on oil and
shift over to renewable technologies like solar, wind and geothermal. That
is absolutely the direction we need to go in," Cantwell said.
The bill extends tax credits for renewable energy such as solar power,
biomass, hydro and geothermal, and offers up to $760 million in tax credits
for plug-in vehicles.
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