Frist: Senate to Take up Tax Bill

WASHINGTON -- Senate Majority Leader Bill Frist of Tennessee announced Tuesday afternoon that the chamber will take up a $70 billion, five-year tax bill on Wednesday, The Wall Street Journal reported.

Republican tax-writers say they hope to clear the legislation to extend President Bush's 15 percent rates of capital gains and dividends by the end of February.

The House and Senate approved competing versions of the bill at the end of last year. Those bills now need to be merged.

The House bill would extend the lower tax rates on capital gains and dividends, but would do nothing to prevent millions of middle class Americans from falling into the alternative-minimum tax. The Senate bill renews a temporary AMT fix, but dropped the lower rates on capital gains and dividends rates under pressure from Democrats and moderate Republicans.

Bush and Republican leaders in Congress hope to approve both provisions by including the capital gains and dividends rates in the $70 billion tax bill -- and approving the AMT patch as a separate bill. The broader $70 billion tax bill also extends a range tax incentives that expired at the end of last year, such as tax breaks to encourage low-income Americans to save for retirement and incentives to encourage companies to invest in new technology.

-- NYSSCPA.org News Staff

Posted on 2/1/06