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| | Washington Digest/House passes corporate tax bill
Sunday, Jun 20, 2004 By Alison Vekshin and Allecia Vermillion Stephens Washington Bureau WASHINGTON -- The House last week approved a corporate tax bill aimed at ending a trade standoff with Europe and also featuring a host of add-ons including a state sales tax deduction and a tobacco farmer buyout. The Republican-drafted bill passed 251-178 with the support of 48 Democrats. The Senate passed a $170 billion corporate tax package in May. At the heart of the bill is a provision that repeals an export subsidy for U.S. companies that was deemed a violation of World Trade Organization rules. The illegal subsidy had prompted the European Union to impose trade sanctions on U.S. products on March 1. The bill also features $140 billion in new tax cuts and spending. Among them were a $10 billion buyout of tobacco farmers and a two-year, $3.6 billion federal income tax deduction for state sales taxes. The second provision allows a taxpayer to choose between deducting state sales taxes or state income taxes from their federal taxable income. The bill drew criticism from Democrats, who said it would encourage the outsourcing of U.S, jobs and was laden with special tax breaks for industry. Republicans argued the bill would reduce the tax burden on U.S. corporations. Reps. John Boozman, R-Rogers, Vic Snyder, D-Little Rock, and Mike Ross, D-Prescott, voted for the measure. Rep. Marion Berry, D-Gillett, voted against it. Energy bill approved Pointing to rising gas prices, the House last week renewed efforts to overhaul the nation's energy policy by passing legislation aimed at encouraging domestic energy production. The $31 billion proposal, which had the support of President Bush, was approved 244-178 and mirrors a House bill passed last November. Like that bill, this one is considered controversial and was not expected to reach final passage. The measure offers tax incentives to encourage an increase in domestic oil and gas production, energy efficiency, and renewable and nuclear energy sources, while reforming the nation's electricity grid. Efforts to move the bill through the Senate stalled last fall amid criticism the bill would harm the environment and benefit oil companies. Berry, Ross and Boozman voted for the bill. Snyder voted against it. Defense amendment failed The Senate rejected an amendment that would have prohibited private contractors from interrogating military prisoners. The amendment to the $447 billion defense bill for 2005 was introduced by Sen. Christopher Dodd, D-Conn. It was killed, 54-43. The amendment would have given President Bush 90 days to replace civilian contractors in Iraq, Afghanistan and at a U.S. base at Guantanamo Bay in Cuba with military personnel. Dodd pointed to abuses at the Abu Ghraib prison in Iraq and to evidence that government-hired private contractors conducted interrogations and intelligence gathering. "This ought to be inherently a governmental function, and one that is not shopped out or outsourced, if you will, to others," Dodd said. Sen. John Warner, R-Va., chairman of the Senate Armed Services Committee, argued the interrogations offer valuable information to U.S. troops. He said 90 days was insufficient time to make the transition. Sens. Blanche Lincoln and Mark Pryor, both D-Ark., voted for the Dodd amendment. Tax-cut amendment rejected The Senate failed to attach an amendment to the 2005 defense budget that would reduce tax cuts for the wealthiest Americans to help fund military operations in Iraq and Afghanistan. The amendment, introduced by Sen. Joseph Biden, D-Del., failed, 44-53. Aimed at offsetting military costs, the provision would have suspended a portion of the reduction in the highest income tax rate for individuals. Under the proposal, the tax cut for the wealthiest 1 percent would revert to 36 percent from 35 percent for the next five years. Republicans argued higher taxes would put a damper on the already flagging economy. Lincoln voted for the amendment, while Pryor voted against it. -- 30 -- |
