This should not surprise anyone, but look at some of the goodies that Republicans managed to squeeze in for business in the Senate tax bill...
05/24 11:05
AOL, Internet Service Providers to Gain From Tax Bill (Update1)
By Rob Wells
Washington, May 24 (Bloomberg) -- Internet service providers such as America Online stand to benefit from a last-minute amendment to the $1.35 trillion tax cut bill.
House and Senate negotiators are working to resolve differences on the bill in hopes of sending it to the White House this week. The bill cuts income tax rates, phases out the estate tax, and boosts tax incentives to save for retirement.
A provision sponsored by Senator George Allen, Republican of Virginia, would allow taxpayers to use tax-advantaged education savings accounts to pay for Internet access if their children use it for educational purposes. They also would be able to pay for computers and educational software from the accounts, popularly known as ``education IRAs.''
America Online, a division of AOL Time Warner Inc., stands to be the biggest beneficiary from the change because its Internet access service is the nation's most popular, with more than 29 million subscribers.
``It is unprecedented new ground gained for elementary and secondary school children in making home computers more affordable with such a tax deduction,'' Allen said in a statement. America Online is based in Allen's state.
Another provision would require corporations to pay about $50 billion in estimated tax payments earlier than planned in 2011, a move designed to help pay for the tax bill.
The two provisions were part of 90-page catchall amendment the Senate added to the tax bill before passing it yesterday on a 62-38 vote.
Education Savings
Allen spokeswoman Carrie Cantrell said the Internet access item ``is not AOL-specific'' and could be used for any Internet service provider.
The bill expands education savings accounts to allow parents to save money tax-free for private school tuition, books and materials for all students. Currently, only college expenses qualify.
The accelerated corporate tax payments were added to keep the bill within the $1.35 trillion tax-cut ceiling spelled out in the Senate legislation.
``Telling corporations they have to kick in $50 billion, six months earlier, is unprecedented,'' said C. Clint Stretch, partner at Deloitte & Touche LLP. ``It would be gentle to call it cynical.''
The amendment says corporate estimated tax payments for the July-September quarter in 2011 will be 170 percent of the normal installment. Stretch estimated this would raise about $50 billion. Rick Grafmeyer, partner at Arthur Andersen LLP, agreed the measure would raise between $40 billion to $50 billion.
``It's laughable,'' Grafmeyer said. ``That's why people think the system is broken.'' Corporations could apply for a refund of overpayment of taxes when they file their returns in 2012 or seek to reduce their fourth-quarter 2011 estimated tax payment by the overpayment amount, he said.
Senator Max Baucus, Democrat of Montana and a main sponsor of the bill, told reporters the amendment contained ``some shifting on corporate payments.''
``It's not a raising of taxes,'' he said. ``It's a shift.''
The main provision in the amendment would permanently extend a corporate research tax credit, which costs $49.6 billion over 10 years.
Campaign Reporting
Another significant amendment exempts state and local candidates from reporting campaign donor information to the Internal Revenue Services. The provision is a compromise crafted between Representative Lloyd Doggett, Democrat of Texas, and Senator Kay Bailey Hutchison, a Texas Republican, over the scope of reporting requirements for so-called 527 political groups.
Last year, Doggett and Senator John McCain, Republican of Arizona, backed legislation signed into law that compels disclosure by ``527'' political groups, so-named for a section in the tax code, and registration with the IRS. The law's intent is to curb campaign finance abuses.
The amendment approved yesterday modifies that law so state and local candidates don't have to report to the IRS so long as they don't receive funds from national parties or political action committees, Doggett said.
``It is designed to ensure that state and local committees already filing with states will not have to have duplicate filings'' in Washington, Doggett said.
Arsenic Levels
Another amendment, sponsored by Senator Christopher Bond, a Missouri Republican, allows self-employed people to fully deduct health insurance costs. And Senator Bill Nelson, Democrat of Florida, won passage of an amendment to allow the sale of tax- exempt bonds so water supply systems can reduce arsenic levels in their water supply.
Other last-minute amendments included a proposal to offset the research and development costs for HIV and AIDS vaccines; expansion of the adoption tax credit; an expanded child care tax credit; and a proposal to allow teachers to deduct some expenses for school supplies.
Some were more obscure. Senator Patrick Leahy, Democrat of Vermont, and Robert Bennett, Republican of Utah, sponsored an item to allow artists to receive deductions of their musical, literary or artistic works at their full market value.
©2001 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.
05/24 11:05
AOL, Internet Service Providers to Gain From Tax Bill (Update1)
By Rob Wells
Washington, May 24 (Bloomberg) -- Internet service providers such as America Online stand to benefit from a last-minute amendment to the $1.35 trillion tax cut bill.
House and Senate negotiators are working to resolve differences on the bill in hopes of sending it to the White House this week. The bill cuts income tax rates, phases out the estate tax, and boosts tax incentives to save for retirement.
A provision sponsored by Senator George Allen, Republican of Virginia, would allow taxpayers to use tax-advantaged education savings accounts to pay for Internet access if their children use it for educational purposes. They also would be able to pay for computers and educational software from the accounts, popularly known as ``education IRAs.''
America Online, a division of AOL Time Warner Inc., stands to be the biggest beneficiary from the change because its Internet access service is the nation's most popular, with more than 29 million subscribers.
``It is unprecedented new ground gained for elementary and secondary school children in making home computers more affordable with such a tax deduction,'' Allen said in a statement. America Online is based in Allen's state.
Another provision would require corporations to pay about $50 billion in estimated tax payments earlier than planned in 2011, a move designed to help pay for the tax bill.
The two provisions were part of 90-page catchall amendment the Senate added to the tax bill before passing it yesterday on a 62-38 vote.
Education Savings
Allen spokeswoman Carrie Cantrell said the Internet access item ``is not AOL-specific'' and could be used for any Internet service provider.
The bill expands education savings accounts to allow parents to save money tax-free for private school tuition, books and materials for all students. Currently, only college expenses qualify.
The accelerated corporate tax payments were added to keep the bill within the $1.35 trillion tax-cut ceiling spelled out in the Senate legislation.
``Telling corporations they have to kick in $50 billion, six months earlier, is unprecedented,'' said C. Clint Stretch, partner at Deloitte & Touche LLP. ``It would be gentle to call it cynical.''
The amendment says corporate estimated tax payments for the July-September quarter in 2011 will be 170 percent of the normal installment. Stretch estimated this would raise about $50 billion. Rick Grafmeyer, partner at Arthur Andersen LLP, agreed the measure would raise between $40 billion to $50 billion.
``It's laughable,'' Grafmeyer said. ``That's why people think the system is broken.'' Corporations could apply for a refund of overpayment of taxes when they file their returns in 2012 or seek to reduce their fourth-quarter 2011 estimated tax payment by the overpayment amount, he said.
Senator Max Baucus, Democrat of Montana and a main sponsor of the bill, told reporters the amendment contained ``some shifting on corporate payments.''
``It's not a raising of taxes,'' he said. ``It's a shift.''
The main provision in the amendment would permanently extend a corporate research tax credit, which costs $49.6 billion over 10 years.
Campaign Reporting
Another significant amendment exempts state and local candidates from reporting campaign donor information to the Internal Revenue Services. The provision is a compromise crafted between Representative Lloyd Doggett, Democrat of Texas, and Senator Kay Bailey Hutchison, a Texas Republican, over the scope of reporting requirements for so-called 527 political groups.
Last year, Doggett and Senator John McCain, Republican of Arizona, backed legislation signed into law that compels disclosure by ``527'' political groups, so-named for a section in the tax code, and registration with the IRS. The law's intent is to curb campaign finance abuses.
The amendment approved yesterday modifies that law so state and local candidates don't have to report to the IRS so long as they don't receive funds from national parties or political action committees, Doggett said.
``It is designed to ensure that state and local committees already filing with states will not have to have duplicate filings'' in Washington, Doggett said.
Arsenic Levels
Another amendment, sponsored by Senator Christopher Bond, a Missouri Republican, allows self-employed people to fully deduct health insurance costs. And Senator Bill Nelson, Democrat of Florida, won passage of an amendment to allow the sale of tax- exempt bonds so water supply systems can reduce arsenic levels in their water supply.
Other last-minute amendments included a proposal to offset the research and development costs for HIV and AIDS vaccines; expansion of the adoption tax credit; an expanded child care tax credit; and a proposal to allow teachers to deduct some expenses for school supplies.
Some were more obscure. Senator Patrick Leahy, Democrat of Vermont, and Robert Bennett, Republican of Utah, sponsored an item to allow artists to receive deductions of their musical, literary or artistic works at their full market value.
©2001 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.
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