2006 Tax Bill - what should be in it

[Pepper]

Here is what should be in the tax bill:

Here are the likely components:

Retention of tax breaks for investors.The top rate on capital gains and dividend will remain 15% through 2010, instead of jumping to 20% after 2008. And low-incomers will continue to get 2008's 0% tax rate through 2010.


A less painful AMT. Exemptions will be increased for 2006...$62,550 for joint filers and $42,500 for singles. This small changefrom last year's exemptions of $58,000 and $40,250, respectively,saves approximately 1.5 million filers from paying the minimum tax.

Elimination of the income ceiling on conversions to Roth IRAs.Currently, filers with adjusted gross incomes of more than $100,000are prohibited from converting an IRA to a Roth. The income limitwill be dropped, allowing upper-incomers to do Roth conversions.Any tax due on a conversion will be able to be spread over four years.The effective date isn't set yet, but it's likely to be around 2011,Senate rules say the bill must be revenue neutral from 2011 to 2015,and the revenue generated by this provision will help meet that goal.

Higher expensing limits for small firms. The scheduled dropin the ceiling to $25,000 after 2007 will be delayed for two more years.This year's cap is $108,000. It will rise with inflation through 2009.

And deferring tax on some banking income that's earned abroad.

The remaining expired provisions will be extended later on in the second package of tax cuts, after negotiators broker a compromise. Retroactive extensions will be OK'd for the R&D credit, 15-year write-offson tenant improvements and for rehabbing restaurants and the jobs creditsfor companies hiring disadvantaged workers. Plus the special deductionsfor state sales taxes, college tuition and teachers' classroom supplies.

 

[DOMS]

Shouldn't this be a poll entitled "Are you a CPA?"

I like the Retention of Tax Breaks for Investors, though.

On a less clinical note, I'd like to see a fat tax. Yeah, there's the problem of defining what is obese (you can't just do it by weight), but I know they can work it out. Just think what this would do to health care costs.

 

[Pepper]

The AMT changes are pathetic.

I think how they paid for it with the Roth conversion think is clever, but it will add to the cost of the bill in the very long run.

 

[lnvanry]

tax law gives me a head ache

 

[maniclion]

$2000 dollars per KW of solar tax credit and no expiration date

 

[topolo]

Repeal of the estate tax.