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Friday, November 18, 2005
Senate votes to extend tax cuts
WASHINGTON -- The Senate passed a $60 billion bill early today that would extend expiring tax cuts and prevent roughly 14 million families from paying higher taxes through the alternative minimum tax.
It drew a presidential veto threat for raising taxes on oil companies.
Much of the bill, passed 64-33 after midnight, preserves tax cuts approved in previous years that are set to expire unless lawmakers keep them alive.
Senate GOP leaders pledged that when the bill returns to the Senate for final approval, it will also extend the life of reduced tax rates for capital gains and dividends, scheduled to end when the calendar flips to 2009.
Democrats roundly oppose extending tax cuts for investment income. Senate leaders dropped an extension from their bill because a key moderate Republican balked at its inclusion.
The bill would stop a tax increase on about 14 million families in line to pay the alternative minimum tax next year. Originally a levy to prevent the wealthy from avoiding taxation, inflation causes the alternative minimum tax to reach into the pockets of more families every year. Lawmakers regularly enact walls to hold it back.
Senate Republicans beat back Democratic attempts to use the bill to pinch oil and energy companies that have been reporting record profits while consumers pay high gasoline prices.
The largest oil companies, nevertheless, would be hit with about $4.3 billion in taxes through a change in accounting methods. That provision drew a veto threat from the White House and upset some Western Republicans.
An amendment offered by Sen. Maria Cantwell, D-Wash., which would have made price gouging a federal crime, received 57 votes. But it needed 60 votes to pass under Senate rules for budget bills. In the end, she voted for the overall bill. Sen. Patty Murray, D-Wash., voted no.
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