Posted on: Saturday, October 4, 2008
Package offers tax relief to millions
By Jim Abrams
Associated Press
WASHINGTON — Millions of taxpayers, thousands of businesses and groups as diverse as solar power developers and natural disaster victims will see tax relief with the House vote yesterday to approve and send to the president a $700 billion financial rescue plan.
The tax relief package attached to the rescue bill promotes renewable energy development and extends dozens of tax breaks.
The largest group of beneficiaries in the tax portion of the financial rescue bill is about 20 million mainly upper-middle income taxpayers. Without congressional action, the alternative minimum tax, or AMT, which originally was supposed to affect only the very rich, would add some $2,000 this year to the tax bill of these people, most earning under $200,000 a year.
The renewable energy incentives include an eight-year extension of investment credits for solar energy, as well as breaks for wind, geothermal and other alternative sources. The solar industry says extension of the credits through 2016 would produce an extra 440,000 jobs and more than $230 billion in investments.
CATCHING A BREAK
There are some four dozen small provisions. Among them, with projected costs over 10 years:
Extending an expired provision that gives Puerto Rico and the Virgin Islands a rebate against excise taxes charged on imported rum. The rebate, at $13.50 per proof gallon, helps finance local infrastructure projects. Cost: $192 million.
Establishing a new tax credit ranging from $2,500 to $7,500 for purchasers of plug-in electric-drive vehicles. Cost: $758 million.
Extending tax credits that expired at the end of 2007 for certain domestic corporations involved in American Samoa economic development. Cost: $33 million.
Extending a credit of up to $10,000 for the training of mine rescue team members. The credit expires at the end of this year and the one-year extension costs $4 million.
Extending for one year a seven-year depreciation timetable that NASCAR and other motorsport racing facilities have had for some time. Without the extension, the tracks would have to depreciate the cost of improvements over 15 years, raising their taxes by $100 million.
Extending for five years a program that reduces import duties on some wool fabrics. Cost: $148 million.
Increasing the single-year deduction in production costs, from $15 million to $20 million, that film and TV productions may take if the costs are incurred in economically depressed areas. In an effort to keep film and TV productions in the U.S., it also allows more companies to use a domestic production deduction. Cost: $478 million.
Extending two programs that fund rural schools and rural communities that have been relying on declining income from logging on federal land or have low property tax bases because they are located on or next to federal lands. Cost: $3.3 billion.
Exempting wooden practice arrows used by children from an excise tax of 39 cents per arrow. The bill would affect about a half-dozen manufacturers nationwide, including one in Oregon; the Oregon senators said they didn't seek its addition to the bailout, however. Cost: $2 million.
Allowing employers to exempt from taxation what they spend on some fringe benefits for workers who commute to work by bicycle, for example reimbursing the cost of parking the bikes. Cost: $2 million.
