A Productive Week in Washington
There were a couple of positive legislative developments in Washington this week. First, there was the passage of the arcanely named tax reconciliation bill. This bill extends the 2003 tax cuts.
These tax cuts include the 15% tax rate on capital gains and dividend income and an extension of the Alternative Minimum Tax (AMT) exemption. The AMT exemption had already expired and the 15% capital gains and dividend rate was scheduled to expire in 2008. The legislation which passed in the House (244-185) and the Senate (54-44) this week extends the AMT exemption for the current year (2006) only and extends the capital gains and dividend rate through the 2010 tax year. The bill included about 30 other assorted tax provisions which are narrower in their focus.
Now, I would have preferred to, and the House could have passed a permanent extension of the 15% rate, but the Senate would not have done so. Therefore, a 2 year extension was the best that we could get. This is policy by incrementalism. Republicans have not been particularly good at this in the past. But it works. We have the tax rates through 2010 and we can always try again next year for permanence. Furthermore,… Read More