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House approves tax package

Backers say the plan helps ease dependence on imported oil while renewing some tax breaks.

May 22, 2008|From the Associated Press

WASHINGTON — The House passed a $54-billion tax package Wednesday that Democratic backers said would help relieve dependence on imported oil while easing the economic strain on parents, homeowners and businesses.

The wide-ranging legislation passed 263 to 160, sending it to the Senate and an uncertain future. Most Republicans opposed the bill because it requires some corporations with offshore offices to pay more taxes and doesn't address shielding taxpayers from the alternative minimum tax.

The White House, citing those factors, threatened a presidential veto.

The measure renews dozens of targeted tax breaks that have expired or will expire soon and provides new tax relief by expanding for a year the refundable child tax credit available to lower-income families. It allows, for one year, a new deduction of property taxes for non-itemizers, worth up to $700 for a couple.

"It would cut taxes for millions of middle-income families," said House Speaker Nancy Pelosi (D-San Francisco).

The measure also provides $17 billion in tax incentives for renewable energy sources such as wind and solar power, carbon capture and sequestration projects, plug-in cars and technology for green buildings. It provides $8.8 billion over 10 years to renew the research and development tax credit. It creates tax credit bonds to finance state and local government initiatives to reduce greenhouse gas emissions.

The bill, said Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.), would reverse the trend of the nation's "addiction to oil and the lack of will to do anything about it."

Republicans' main protests were over the $54 billion in so-called offsets, new sources of money to pay for the legislation. One would close a loophole allowing hedge fund managers and others working for offshore corporations to defer taxes on their compensation. Another would delay implementation of a tax break for multinational corporations operating overseas.

"There is no need to raise taxes to prevent a tax increase," said Republican leader John A. Boehner of Ohio.

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