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House, GOP Tax Plans in Congress

•  Practice Focuses     updated  2008/03/13 20:17

Options debated by the House and Senate for dealing with President Bush's tax cuts when they expire at the end of 2010:

_Senate Democrats, including presidential rivals Hillary Rodham Clinton of New York and Barack Obama of Illinois, pushed through a plan to selectively preserve $340 billion of President Bush's tax cuts through 2013. It would extend the 10 percent tax bracket, the $1,000 per child tax credit, relief from the so-called marriage penalty and various tax cuts for people serving in the military and national guard.

_Senate Republicans rallied behind a losing effort to extend an additional $376 billion of Bush's tax cuts by preserving all other current tax rates. Otherwise those rates will rise 3 percentage points at the end of 2010 and the highest rate will rise from 35 percent to 39.6 percent. The GOP plan also would have provided more generous relief on inheritances. Estates worth up to $5 million for individuals and $10 million for couples would have been exempted from the estate tax, with a 35 percent rate above those inheritance levels. That rate is now scheduled to return to 55 percent in 2011. Another Republican plan also offered middle-income families long-term protection from becoming subject to a higher alternative minimum tax rate.

_House Democrats would allow all of Bush's tax cuts to expire, effectively raising taxes by $683 billion from 2011 through 2013.

_House Republicans would preserve all of Bush's tax cuts and eliminate the alternative minimum tax — at a total cost of almost $1.2 trillion in revenues for the Treasury over the next five years. Some Medicare and Medicaid benefits would be cut to help pay for their plan.


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