House and Senate pass versions of Bush tax cuts
Tuesday, August 07, 2012
The U.S. House of Representatives passed H.R. 8, the Job
Protection and Recession Prevention Act, on August 1 by a vote of 256 Yea to 171
No along party lines to extend the expiring tax cuts for households and
businesses at all income levels through 2013.
These tax cuts are known as the "Bush Tax Cuts." The vote came following the House rejection
along party lines of the Democratic alternative 170 Yea to 257 No that would
have limited the cuts to taxable income over $200,000 for individuals and
$250,000 for couples.
The action in the House came a week after the U.S. Senate
extended the tax cuts only up to the $200,000 and $250,000 ceilings contained
in the Democratic alternative in House.
The House passed language contains the important extension
of the estate tax deduction of $5 million and a maximum tax rate of 35 percent. Like the other Bush Tax Cuts, the estate tax
deduction was set to expire on Dec. 31.
The Senate passed bill does not contain the extension of the estate tax
In addition, both the House and Senate version of the tax
bill includes the deduction of state sales taxes in lieu of the state income
deduction. This tax deduction benefits marine retailers in states such as Texas and Florida that
do not have an income tax. It also benefits them when the sales tax of a major purchase, like a boat, exceeds the state
income tax paid.
The goal in Congress is to have a tax bill to the President
after the elections during an anticipated Lame Duck session. The House and Senate will now have to get
together in a conference to work out the differences between the two
bills. Of course, the parliamentarian
will have to rule on the validity of the Senate passed bill since the
Constitution says all tax bills must originate in the House and the Senate did
pass its version first in violation of the Constitution
MRAA supports re-authorization of the Bush Tax cuts,
especially the estate tax and the sales tax deduction.