US House Now Debating $113 Billion Tax Extenders, UI Package

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–House Democratic Leaders Hope Trimmed Down Plan Can Pass The House
–House Plan To Be Voted on In Two Pieces; Would Boost Defict By $54B
–Senate Expected To Take Up Extenders Bill Week of June 7th

By John Shaw

WASHINGTON (MNI) – After a week of frantic negotiations within the
House Democratic caucus, the House is now debating a $113 billion
package of tax cuts and benefit extensions.

The House is expected to vote on the plan later Friday afternoon.

The plan is the third attempt by House Democratic leaders to
assemble a tax and benefit package that could clear the House.

At the beginning of the week, Democratic leaders unveiled a $192
billion plan which was later scaled back to $144 billion.

When that plan was not able to attract sufficient Democratic
support to pass, House Democratic leaders scaled it back even further.

The package before the House would extend about a dozen tax cuts
that expired at the end of last year, expand unemployment benefits, and
provide a 19 month extension of current Medicare payments for doctors,
the so-called “doc fix.”

The House will vote on the package in two pieces: one vote for the
doc fix and one vote for the rest of the plan.

The combined package would add about $54 billion to the deficit
over a decade.

The revised plan includes changes in the treatment of carried
interest earned by private equity fund managers, venture capitalists,
and real estate investors.

But these do not become effective until Dec. 31.

Under the plan, instead of being considered as capital gains, in
the first two years of the bill, 50% of their carried interest would be
treated as ordinary income for tax purposes. The remaining 50% would be
taxed as capital gains. When the bill is fully implemented, 25% of
carried interest would be taxed as capital gains and 75% as ordinary
income.

If the House passes the tax extenders and benefit package, the
Senate will take up the plan when it returns from its Memorial Day
recess the week of June 7.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]

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