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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: sandeep who wrote (91522)	11/22/2009 11:44:37 PM
From: puborectalis	Respond to of 94695

House Democrats plan to move next month to renew about $30 billion in tax breaks before they expire at year’s end, including a research credit promoted by companies such as Dow Chemical Co. Representative Charles Rangel of New York, the Democratic chairman of the Ways and Means Committee, said yesterday the panel will send a measure containing the extensions directly to the House floor for consideration, bypassing a committee debate. The committee is moving to renew 45 provisions, including deductions for college tuition and for state and local sales tax payments, which will save individuals $1.5 billion and $1.8 billion, respectively. Other breaks include benefits for films and television shows produced in the U.S., and an incentive for producing rum in Puerto Rico and the U.S. Virgin Islands. The biggest is a research credit for businesses, worth $7 billion in tax savings. The R&D Credit Coalition, a Washington- based trade group, estimates the credit is equal to a federal subsidy of 6 cents for every dollar a company spends on research in the U.S. The group has more than 500 members including Dow, the largest U.S. chemical maker, CA Inc., the second-largest maker of software for mainframe computers, and Microsoft Corp., the world’s biggest software maker. House Democrats also plan to renew a $4 billion benefit allowing U.S.-based companies like General Electric Co. to defer tax on income from their overseas lending activities. Offshore Tax Evasion Massachusetts Representative Richard Neal, a Democrat, said the tax break extensions are likely to be funded, in part, by legislation introduced Oct. 27 by Rangel and Senate Finance Committee Chairman Max Baucus that is designed to help the Internal Revenue Service fight offshore tax evasion. Neal said the Ways and Means panel likely will defer extending a so-called “patch” of the alternative minimum tax that spares about 30 million households from paying about $70 billion in higher income taxes this year. Congress would have to extend the patch in 2010 to keep the higher taxes from taking effect then. Committee member Chris Van Hollen of Maryland said the panel also is leaning toward passing a new, permanent estate tax instead of a one-year measure to keep the current levy from expiring next year. “That would be the prevailing view,” Van Hollen said. Another option, he said, would be to enact a multiyear extension of current law to ensure there is consistent tax treatment of large estates over the next several years. The current tax imposes a top levy of 45 percent on couples’ estates valued at more than $7 million. In 2010 the tax is scheduled to vanish under a phase-out Congress approved in 2001. It is due to return in 2011 with a top rate of 55 percent on estates worth more than $1 million.