House cuts taxes and passes the debt to the
next generation
Reuters
December 8, 2005
WASHINGTON, Dec 8 (Reuters) - The U.S. House of Representatives on Thursday
approved legislation extending reduced tax rates for investment income that
Republican backers said were needed to maintain U.S. economic growth.
The House voted 234-197 to extend for two years a 15 percent tax rate for
capital gains and dividends. The reduced investment tax rates were the
centerpiece of President George W. Bush's 2003 tax cut and without
congressional action they will expire at the end of 2008. Rates will go back to
20 percent for capital gains and regular income rates for dividends.
The package passed by the House would reduce federal revenues by about $56
billion over five years and Democrats complained that the Republican majority
was increasing the deficit and cutting spending for poor children, education
and other social programs in order to give tax cuts to the rich.
The bill is part of a broader effort by the Republican-controlled Congress
to cut spending and extend Bush's tax cuts. The Senate last month approved its
version of tax cut legislation, omitting provisions for capital gains and
dividends. The two sides will have to work out their differences before sending
legislation to Bush for his signature.
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