The Senate this week is poised to pass three-part legislation to keep the existing tax rate for most Americans, provide some disaster relief and stimulate the production of energy in the United States.
The alternative minimum tax “patch” is the highest priority, as it would stop a tax increase on middle-class taxpayers. While supported by most members, disagreement arose over the concern that the tax change would be “paid for” by other tax increases. Also included in the legislation is an extension of other tax benefits, including the state and local sales tax deduction, brownfields expensing, 15-year cost recovery of leasehold, restaurant and retail improvements and the research and experimentation tax credit. Disaster areas receive some specific tax relief, including the victims of the Midwest floods, through limited demolition and clean up expensing.
Finally, the bill encourages energy production by extending the following: production tax credit for energy produced through biomass; the investment credits for wind and solar energy; and the energy-efficiency property tax credits for both residential and commercial properties.
The bill is expected to be passed out of the Senate and sent to the House, where its fate is uncertain. Some House Democrats are demanding the legislation be fully “paid for” through increased taxes, something the Senate has been unable to support.
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