Congress Delays Plans to Extend Bush's Tax Cuts

WASHINGTON -- In the wake of Hurricane Katrina’s added expense and political implications, Republican leaders in Congress have delayed plans to extend dividend and capital gains tax cuts and may shelve them for the rest of the year, The Wall Street Journal reported Tuesday.

The House and Senate had planned a fall legislative agenda around a massive budget bill that extended to 2010 the 15 percent tax rate on dividends and capital gains signed by President Bush two years ago and scheduled to expire at the end of 2008. But Republicans have decided that taking any action on the bill is politically untenable at least until late October in the suddenly changed political and budgetary environment.

Lawmakers do appear likely to approve a temporary measure exempting millions of middle-income taxpayers from paying the so-called Alternative Minimum Tax, which has increased the tax burden for a growing portion of Americans in recent years.

Tax-writing committees on Capitol Hill also are looking to act quickly on new, targeted tax relief to help residents and businesses in storm-stricken areas get back on their feet. Finance Committee Chairman Charles Grassley of Iowa and ranking Democrat Max Baucus of Montana Monday unveiled a $5 billion to $7 billion package of tax relief for individuals that would make it easier for victims to get access to cash.

-- NYSSCPA.org News Staff

Posted on 9/13/05