Tax News

CCH (cch.taxgroup.com) reports:

  Senate Finance Committee Chairman Max Baucus, D-Mont., on July 24 introduced the Jobs, Energy, Families and Disaster Relief Bill of 2008 (Sen 3335), a revised $123 billion tax extender bill, in hopes of wooing recalcitrant Republicans when the Senate attempts once again to move the legislation late in the week beginning July 28. Baucus dropped some controversial provisions and added a few sweeteners to boost chances of reaching the 60-vote majority necessary to move the legislation.

  Baucus added a $3.9 billion provision to create parity in mental health benefits, a cause long championed by two Republican senators who had previously voted against earlier versions of the extenders package. Another new provision, aimed at wooing Republicans from Midwestern states hard hit by early summer storms, would provide $ 4 billion in tax incentives to help those states recover and rebuild. In addition, Baucus dropped a controversial provision opposed by a majority of Republicans that would have provided a $1.5 billion tax break for trial lawyers.

  A new revenue-raising provision that creates mandatory basis reporting by brokers for transactions involving publicly traded securities such as stock, debt, commodities, derivatives and other items as specified by the Treasury, was also included. All of the provisions in the measure are offset, with the exception of a one-year patch for the alternative minimum tax (AMT). "Senators who support good-paying jobs, new energy solutions and America's working families must vote to pass this legislation before Congress heads home," said Baucus.

  Sen 3335 builds on the Energy Independence and Tax Relief Bill of 2008 (Sen 3125) that Baucus unveiled in June. He noted that the Senate bill text can replace the text of House tax legislation to comply with procedural rules. In addition to the original legislation, which provides another year of relief from the AMT, the measure replenishes the Highway Trust Fund to enable infrastructure repair and provides some new incentives for alternative energy and business and individual tax relief. The bill also extends tax incentives that expired at the end of 2007 or are set to expire at the end of 2008, such as the research and development tax credit, college tuition deduction and the state and local sales tax deduction.

  Senate Republican leaders qualified the revised legislation as inching nearer to something they might endorse, but stopped short of saying they were in agreement, primarily because of offsets for the renewal of tax breaks already in place. House budget hawks still insist that all tax breaks must be paid for, leaving another major hurdle before extenders legislation can be signed into law in 2008.

  By Jeff Carlson, CCH News Staff

Jobs, Energy, Families and Disaster Relief Act of 2008, Sen 3335 [Document will be available on July 29. --CCH.]

SFC Release: Baucus Updates Tax Relief Bill for Jobs, Energy, Families

SFC Staff Summary of the Jobs, Energy, Families and Disaster Relief Act of 2008

SFC Estimated Budget Effects of the Jobs, Energy, Families, and Disaster Relief Act of 2008 [Document will be available on July 29. --CCH.]