Senate Passes $70B Tax Bill

WASHINGTON -- The Senate passed $70 billion in tax cuts Thursday by a 66-31 vote, The Associated Press reported.

The central feature of the tax bill, left over from last year's agenda, holds back the alternative minimum tax, which threatens millions of families with higher taxes this year unless lawmakers stop its growth.

The House version of the bill carries a top GOP priority, a two-year extension of the Bush administration's tax cuts on investment income. Though not scheduled to expire until the end of 2008, many Republicans want to act now to give the tax breaks a longer life.

Republicans expect the final version of the bill to extend tax cuts for capital gains and dividends. It will be up to negotiators to determine how to use their instructions to cut taxes by as much as $70 billion over five years to deal with the growing alternative minimum tax and expiring tax breaks for investors.

Other portions of the bill include:

• Reviving a business credit for research and development and keeping it in place for two years.
• Extending deductions for college tuition and teachers' expenses, as well as a credit for low-income savers.
• Changing an accounting practice used by oil companies that hits them with $4.3 billion in increased taxes.
• Instituting tax breaks for coal companies that spend more on safety equipment and training.
• Authorizing more spending for military equipment, along with more money for veterans health care, disability compensation and hospitals.

-- NYSSCPA.org News Staff

Posted on 2/3/06