Tax News

CCH (cch.taxgroup.com) reports:

The Bush administration's economic, tax and financial policy shops are keeping a close eye on the effect of the tightening credit and housing markets on U.S. economic growth, according to a Treasury spokesman. Treasury Secretary Henry M. Paulson, Jr., recently noted that the current housing downturn will exact a "penalty" on economic growth, but the White House has not yet set a deadline for the President's Working Group on Financial Markets to complete its review of the role played by credit rating agencies and mortgage loan originators in the current housing downturn and credit crunch, according to Jennifer Zuccarelli, a Treasury spokeswoman. The next forecast on federal revenue and deficit estimates that would reflect any changes in the economic growth rate will be completed in December by the Office of Tax Analysis, noted Treasury spokesman, Andrew DeSouza.
Meanwhile, the Treasury Department continues to consider measures, such as lowering the U.S. corporate tax rate, to increase U.S. competitiveness abroad. "We live in a competitive economic environment globally" that requires the U.S. to reexamine its business tax and regulatory schemes, noted White House Press Secretary Tony Snow at a press briefing on September 12. There is no deadline yet for completing the Treasury review of U.S. competitiveness initiatives, confirmed DeSouza.
A top priority item on the administration's tax agenda in 2007 is to pass legislation extending relief from the alternative minimum tax (AMT). "We need a patch right now so that millions of Americans don't have to pay the AMT" before the current extension expires, DeSouza said. "What contributes to economic growth and strengthens it (is) low taxes, low regulations, and rewarding people who work hard and also generate value for the economy," Snow noted at his final briefing before stepping down as White House Press Secretary on September 14.
By Paula Cruickshank, CCH News Staff