Roundup of Tax Bill
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Reuters has the best easy-to-read summary of the tax bill that the House passed in the middle of a Friday night before taking off yet again for a monthlong recess. The bill would make the US borrow another $310 billion in the next 10 years (assuming the estimates are correct) and will cost several times that once you kick in interest.
* Raises minimum wage over three years to $7.25 an hour from $5.15 an hour. Allows employers to count tips toward meeting minimum wage increases, overriding state laws prohibiting that.
* Excludes estates up to $5 million per individual from inheritance taxes as of January 1, 2015. That amount is phased-in starting in 2010 when the individual estate tax exemption will rise to $3.75 million from $3.5 million. It also gradually increases exemption from gift taxes to $5 million.
* Taxes estates over $5 million to $25 million at the capital gains rate, currently at 15 percent. Anything over $25 million would be taxed at 30 percent. President George W. Bush’s 2001 tax cut included a phase out of the estate tax but full repeal would only last for one year in 2010. Without congressional action, in 2011 the tax would be reimposed on estates over $1 million and the top rate would be 55 percent.
* Renews a number of popular expired tax breaks for individuals and businesses and extends them through 2007. Tax breaks include a $4,000 deduction for college tuition, a deduction for state sales taxes and a tax credit for research and development.
* Shifts some coal companies’ costs for retiree health benefits and land reclamation to taxpayers.