Domestic Taxes

The House is slated to vote on legislation later Thursday that encourages foreign investment in U.S. real estate by doubling the amount of foreign capital that can be invested in publicly-traded Real Estate Investment Trusts (REITs). 

The bill is sponsored by Rep. Joseph Crowley (D-N.Y.), who has argued his proposal will open revenue streams to real estate investments that continue to suffer in the current economic climate.  

A group of some of the country’s largest financial, technology and manufacturing interests warned President Obama on Wednesday that higher taxes on capital gains and dividends would cost thousands of jobs, “stifling the recovery.”

The Alliance for Savings and Investment praised the administration for seeking to keep the tax rates low instead of allowing them to revert to much higher rates by next year. If Congress does not act, capital gains rates would rise from 15 percent to 20 percent for most filers, and dividends rates would be taxed at the marginal income rate, or as high as 39.6 percent.

The alliance — including the U.S. Chamber of Commerce, Verizon, Altria, UPS and others — wants to cap the tax rates at 15 percent for dividends and capital gains.

“An extension of these rates would provide much needed certainty to businesses, families and retirees who now face the threat of a looming tax increase during this time of continued economic and market uncertainty,” the group wrote in a letter to the president.

The scheduled tax increase on capital gains and dividends at the end of the year will cause an 8.6 percent drop in the Standard & Poor’s 500 Index, according to a report by Barclays Capital.

Republican members of the House Rules Committee on Wednesday criticized Ways and Means Chairman Sandy Levin (D-Mich.) for giving them 90 minutes to review a bill before having to vote on whether it would be subjected to debate on the chamber floor tomorrow.

House Majority Leader Steny Hoyer (D-Md.) on Wednesday said the scheduled tax increase on wealthier taxpayers will not harm the economy.

The fate of a small-business lending and tax-cut measure could rest on whether Senate Democrats and Republicans agree to consider an amendment that would repeal a portion of the new healthcare law, aiming to reduce required tax filings by small businesses. 

Sen. Lamar Alexander (R-Tenn.), chairman of the Republican Conference, on Wednesday called the amendment a “priority of the Republican leadership.” 

“We’ve made it clear to Sen. Reid that we want a vote on it,” Alexander told reporters this afternoon. “We need a vote on this before the August recess, it’s that important.”

Senate Republicans are pressing for inclusion of an amendment that would repeal a portion of the new healthcare law, aiming to reduce required tax filings by small businesses. 

Rep. Mike Johanns (R-Neb.) wants a vote on this amendment that would nix a provision requiring any taxpayer with business income to issue 1099 forms to all vendors from whom they buy more than $600 of goods or services in any year. 

"This mandate has absolutely nothing — absolutely nothing — to do with improving the healthcare of this country, and it really should not be a part of that law or any other law, for that matter," Johanns said Wednesday on the floor. 

He is requesting a vote Wednesday on the amendment, which he said is offset. Senate Democrats and Republicans are still working on an agreement that would allow for several GOP amendments to the measure and a possible vote on the bill by the end of the day. 

Democratic leaders say they are a long way off from imposing taxes on large financial institutions.

The Senate Finance Committee released Tuesday night several changes to the substitute amendment to the small business lending and tax bill expected to be completed Wednesday. 

The substitute includes a $30 billion fund for community banks to lend to small businesses, estimated to raise $1.1 billion over 10 years. 

Republican Sens. George LeMieux (Fla.) and George Voinovich (Ohio) joined Democrats last week in voting to end debate on the amendment and add the fund they argue will help create jobs. 

Senate Democrats and Republicans are expected to reach an agreement on GOP amendments to the bill, which should smooth its passage. 

Agriculture disaster relief also has been added into the substitute for 2009 losses for crops, including specialty crops, livestock, sugar, aquaculture, cottonseed and poultry. 

Former "Law & Order" actor and presidential candidate Fred Thompson joined the League of American Voters on Tuesday to launch a national petition calling for the extension of all the Bush tax cuts.