Wednesday, September 14, 2005

Another day of tax debate in Washington

While most of the nation's attention dwells either on relief efforts related to Hurricane Katrina or the confirmation hearings on John Roberts, tax issues have been very much present in the nation's capitol. In three separate posts, Tax Analysts looks at tax relief for hurricane victims, an appeal for a year-long holiday on a jet fuel tax and a reconciliation and extension bill. In regard to tax relief, the House is looking at several incentives for charitable contributions including an increased mileage rate. Other issues include expedited refunds for evacuees and ability to make tax-free withdrawals from certain retirement plans (like original IRAs). The request to suspend the jet fuel tax were made by industry leaders James May and Deborah McElroy in the presence of bankruptcies of Delta, Northwest and United. The leaders claimed that the tax was part of a 1993 compromise that was supposed to be short-lived. Comments from Republican Senators Grassley, Lott and McCain were not overly encouraging, however. Finally, in the face of Democratic scorn and the expensive rebuilding from Katrina, the $70 billion reconciliation bill is moving forward. Although there is general agreement that many of the expiring tax provisions should be extended, the Democrats want dividend and capital gain rate reduction provisions dropped.


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