The Senate Finance Committee may not end up approving a big tax-cut package after all.[@@]
The committee had scheduled a meeting today to consider a new bill, the Tax Relief Act of 2005, but it ended up postponing the meeting. Some press reports are suggesting that the bill might be doomed.
The tax bill, often described as a companion to S. 1932, a deficit reduction bill, would create many tax breaks for survivors of the recent hurricanes and for donors to relief efforts.
The bill also would extend a variety of tax breaks originally created by the Economic Growth and Tax Relief Reconciliation Act of 2001.
If enacted, the tax bill would extend EGTRRA provisions that:
- Cut the tax rates for dividend income and capital gains.
- Let most taxpayers deduct up to $4,000 in college expenses from taxable income.
- Increase the alternative minimum tax exemption.
Congressional analysts have estimated that the bill would create about $69 billion in tax cuts over 5 years.
Sen. Olympia Snowe, R-Maine, and other Senate Finance Committee members have suggested that the cost of recovering from Hurricanes Katrina, Rita and Wilma makes this the wrong time to enact tax cuts or extensions of tax cuts.
Meanwhile, House leaders have decided to postpone action on their budget-cutting bill, H.R. 4241, because provisions calling for cuts in Medicaid, food stamps and education funding have made the bill unpopular with some Republicans as well as with many Democrats.
Two H.R. 4241 provisions of interest to the insurance and employee benefits industries would increase Pension Benefit Guaranty Corp. premiums and toughen restrictions on older Americans who try to qualify for Medicaid nursing home benefits by transferring assets to others.