In a victory for the White House as well as cattle producers and small business owners nationwide, the Senate May 15 narrowly approved a $350 billion tax cut package last night, with Vice President Cheney casting the deciding vote.
“Last night’s 51-50 vote moves this much-needed economic package one step closer to helping hard-working Americans, such as our nation’s cattle producers,” says Jay Truitt, executive director of Legislative Affairs, National Cattlemen’s Beef Association (NCBA). “Small business operations are in dire need of revitalization, and the White House’s economic stimulus initiatives, and these legislative remedies will help accomplish that goal.”
To expedite conferencing, and President Bush’s request that the bill be on his desk before Memorial Day, the Senate bill (S. 1054) was passed as an amendment to the House version, H.R. 2. Conferees have already been named: Max Baucus (D-MT), John Breaux (D-LA), Charles Grassley (R-IA), Orrin Hatch (R-UT), Trent Lott (R-MS), Don Nickles (R-OK), and John Rockefeller (D-WV).
Provisions in the Senate bill include:
Increases in expensing levels for small businesses
- Increases the deduction level to $75,000 through 2012; Costs are estimated at $23.4 billion.
Alternative Minimum Tax (AMT)
- Raises the AMT exemption increasing it by $12,000 per couple; Senate cost will be around $49.3 billion.
Special rules for livestock sold on account of weather-related conditions
- Gives up to four years of capital gains relief to producers affected by drought sales of livestock.
Medicare Payments
- $25 billion in additional funding for Medicare providers in rural areas.
An amendment eliminating dividend taxes for the next three years is expected to be a big sticking point as this package goes to conference.
“NCBA does not have specific policy on the elimination of dividends,” says Truitt. “While the dividend provision will not affect cattle producers as much as some of the other provisions, we understand this is a stepping stone towards complete reform of the U.S. tax code which is something the NCBA strongly supports.”
The package is expected to go to conference next week, and could secure for President Bush the third-largest tax cut in history.