I am following up briefly on yesterday's message on the Bush Tax cuts and continuation of the current estate tax.
The House of Representatives voted yesterday 256 to 171 (along party lines) to extend the expiring tax cuts for households and businesses at all income levels through 2013. The vote came following the House rejection of the Democratic alternative, 170-257 (again on party lines), that would have allowed the cuts to expire on taxable income over $200,000 for individuals and $250,00 for couples.
The House action stands in contrast to a move last week by the Senate that extended the tax cuts only up to the $200,000 and $250,000 ceilings.
The House passed bill contains the important estate tax deduction of $5 million and a max tax rate of 35 percent. These provisions are set to expire on December 31. The Senate Bill does not include the estate tax.
Another key to marine retailers is that the action in the House keeps the deduction for state sales taxes. This is especially important in states such as Texas and Florida that do not impose an income tax. As a reminder, an individual can take a sales tax deduction if the tax payer makes a major purchase and the sales tax paid is greater than the income tax paid.
The goal has always been to have a tax package after the elections in a lame duck session. Members are more interested in the election campaign than reaching a tax compromise prior to the elections.
MRAA supports the extension of the Bush Tax cuts including repeal of the estate tax and keeping the sales tax deduction. We believe our economy is far too fragile for a tax increase. Congressional intent is to study the tax code next year for potential revision.