The Senate Finance Committee is considering President Obama's economic stimulus package as leaders call for increased tax cuts.

Among the proposals is a call from ranking member Sen. Charles Grassley (pictured), R-Iowa, calling for a patch to stop the spread of the alternative minimum tax.

"I'll be fighting in the Finance Committee to include an AMT patch in this legislation," he said in a statement. "Without it, at least 24 million middle-income families will face a tax increase, and that's the last thing anyone needs right now."

Senate Finance Committee Chairman Max Baucus, D-Mont., released his own plan, which contained some key differences from the House Democrats' plan. It includes a different phase-out level for the Making Work Pay tax credit. The House version starts phasing out the credit for taxpayers who make more than $75,000, while the Senate version starts phasing it out for taxpayers who make more than $87,500.

The Senate plan, like the House plan, provides a temporary increase in the child tax credit, but it is smaller in the Senate version. The Senate plan, unlike the House plan, temporarily suspends federal income tax on the first $2,400 of unemployment benefits per recipient. The Senate plan also gives businesses the ability to write off more net operating losses and claim more energy tax breaks for prior years.

Republicans in the House are also pushing for more tax cuts, with minority leader John Boehner, R-Ohio, calling for lowering the bottom two tax rates, from 15 percent to 10 percent, and from 10 percent to 5 percent. "Under our proposal, every taxpaying family's gross income will increase by $500 for those in the current 10 percent bracket and $1,200 for those in the current 15 percent bracket," he said in a statement.

Boehner and other Republicans have also proposed allowing small businesses to take a tax deduction equal to 20 percent of their income, which they said will free up funds to retain current employees and hire new workers. They also called for making unemployment benefits tax-free and offering a credit of $7,500 to homebuyers who can make a minimum down payment of 5 percent.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access