Tax News

CCH (cch.taxgroup.com) reports:

  The Senate on July 30 failed to approve a motion to proceed to the Jobs, Energy, Families, and Disaster Relief Bill of 2008 (Sen 3335), sending the package of tax extenders to defeat for a second day in a row and most likely leaving until September the next opportunity to revisit the bill. The legislation in its current form would provide $18 billion in tax breaks for alternative and renewable energy, in addition to business tax incentives, protection from the alternative minimum tax, and extension of the college tuition tax deduction and state and local sales tax deduction.

  The Senate failed to end debate on the motion to call up the bill by a 51-43 margin, nine short of the 60 votes needed; however, Senate Majority Leader Harry Reid, D-Nev., said he would keep open the motion to proceed to the bill. Most Senate Republicans support the tax breaks but oppose the use of revenue-raisers to pay for them. GOP leaders have suggested they would consider offsetting some of the new tax breaks and other provisions included in the legislation in exchange for making many of them permanent.

  Further complicating passage is a standoff between leaders of both parties over provisions in energy legislation that would curb the practice of oil speculation (Sen 3268). Reid had linked approval of the extenders legislation to acceding to Republican demands to offer amendments to Sen 3268 allowing offshore drilling, oil shale development and increased use of nuclear energy. Reid said that Senate Republicans knew full-well that blocking the extenders bill would put an end to any agreement to deal with other energy amendments but "they did it anyway."

  Senate Finance Committee Chairman Max Baucus, D-Mont., who authored the bill, said the Senate missed a "huge opportunity" and members will have to face the wrath of angry constituents during the August recess. "We're going to hear from folks who can't afford a heavy hit on their taxes from the alternative minimum tax or from the expiration of other family tax cuts that are running out right now," said Baucus. "I hope senators will answer the call in September, and work together for jobs, energy, and American families."

  By Jeff Carlson, CCH News Staff