Rangel Says House Democrats Will Seek to Renew U.s. Tax Breaks
Rangel, the Democratic chairman of the Ways and Means Committee, said yesterday the panel will send a measure containing most of the extensions directly to the House floor for consideration, bypassing a committee debate.
As many as 73 tax laws are due to expire Dec. 31. They include deductions for college tuition and for state and local sales tax payments, benefits for films and television shows produced in the U.S., and an incentive for producing rum in Puerto Rico and the U.S. Virgin Islands.
A research credit for businesses is one of the biggest. The R&D Credit Coalition, a Washington-based trade group, estimates the credit is equal to a federal subsidy of 6 cents for every dollar a company spends on research in the U.S. The group has more than 500 members including Dow, the largest U.S. chemical maker, CA Inc., the second-largest maker of software for mainframe computers, and Microsoft Corp., the worlds biggest software maker.
Massachusetts Representative Richard Neal, a Democrat, said the tax break extensions are likely to be funded, in part, by legislation introduced Oct. 27 by Rangel and Senate Finance Committee Chairman Max Baucus thats designed to help the Internal Revenue Service fight offshore tax evasion.
Alternative-Minimum Tax
Neal said the Ways and Means panel likely will defer extending a so-called “patch” of the alternative minimum tax that spares about 30 million households from paying about $70 billion in higher income taxes this year. Congress would have to extend the patch in 2010 to keep the higher taxes from taking effect then.
Committee member Chris Van Hollen of Maryland said the panel also is leaning toward passing a new, permanent estate tax instead of a one-year measure to keep the current levy from expiring next year.
“That would be the prevailing view,” Van Hollen said. Another option, he said, would be to enact a multiyear extension of current law to ensure there is consistent tax treatment of large estates over the next several years.
The current tax imposes a top levy of 45 percent on couples estates valued at more than $7 million. In 2010 the tax is scheduled to vanish under a phase-out Congress approved in 2001. It is due to return in 2011 with a top rate of 55 percent on estates worth more than $1 million.