Domestic Taxes

The Senate is expected propose amendments to a House-passed tax extenders measure after returning from a weeklong break. 

The Senate returns Monday afternoon, but leadership hasn't decided when consideration will begin on the two-pronged extenders measure, which includes an extension of unemployment benefits and a fix for Medicare payments to doctors, according to a Democratic aide. 

The fate of the measure is uncertain. At this point, the Senate probably doesn't have enough votes to pass the measure, and it's unknown how the House would react to changes. 

House Democrats bailed from support of the bill – 34 on the unpaid for unemployment benefits and 15 from the Medicare "doc fix."

The federal homebuyer tax credit, which has been credited by some with helping the real estate market rebound from a historic downturn, is still available for military personnel.

The credit provides an $8,000 tax break for first-time homebuyers and $6,500 in relief for repeat home purchasers for qualifying service members who purchase a home on or before April 30, 2011.

These credits expired in April for civilians.

Military personnel serving outside the United States for at least 90 days during the period beginning Dec. 31, 2008, and ending May 1, 2010, still qualify for the credit.

The 36-month recapture requirement is waived for service workers who took advantage of the credit but have been forced to sell their home as a result of serving their country.

The Treasury Department on Thursday announced it has issued $106 billion in Build America Bonds, through May 31, 2010. 

The bonds now constitute 21 percent of the municipal bond market. 

Opposition to taxing soft drinks and fast food is strongest in the South.

The oil spill in the Gulf of Mexico should force Congress to provide more tax incentives to spur clean energy development while also cutting back billions in tax breaks for oil companies. 

President Barack Obama pushed for accelerating the transition to a clean energy economy by "rolling back billions of dollars in tax breaks to oil companies so we can prioritize investments in clean energy research and development," during a speech at Carnegie Mellon University in Pittsburgh on Wednesday.  

He urged Congress to look again at energy legislation that would set up a cap-and-trade system, requiring companies to purchase carbon pollution credits as they gradually change over to cleaner ways of manufacturing. 

"The only way the transition to clean energy will succeed is if the private sector is fully invested in this future — if capital comes off the sidelines and the ingenuity of our entrepreneurs is unleashed," he said. "And the only way to do that is by finally putting a price on carbon pollution."

He acknowledged that it also "means tapping into our natural gas reserves and moving ahead with our plan to expand our nation's fleet of nuclear power plants."

Obama had proposed an offshore oil-drilling plan but made clear on Wednesday that oil production can only be pursued if it's "safe and only if it's used as a short-term solution while we transition to a clean energy economy."

Sen. Chuck Grassley (R-Iowa) on Wednesday urged Senate Majority Leader Harry Reid (D-Nev.) to act on making changes to estate tax law before it reverts back to pre-2001 levels in 2011.

The senator warned that no action would mean thousands of small business owners and farmers would be subjected to the tax.

"I hope that the Democratic leadership will soon reveal their hand so that those thousands of small businesses and farmers aren't hung out to dry," he told reporters.

Former Minnesota Rep. Jim Ramstad (R) has joined alliantgroup, a tax speciality firm that helps businesses with federal and state tax incentives, as a senior advisor. 

"I'm proud to be associated with alliantgroup and the critical service they provide not only to businesses, but to our economy and to the creation of American jobs," Ramstad said Wednesday in a statement. "Helping small and mid-sized companies grow has been a focus of my career and alliantgroup is dedicated to the same mission."

Ramstad served in Congress from 1991 to 2009 and was a member of the House Ways and Means Committee and the panel's Health subcommittee. He was ranking member of the Oversight subcommittee during his nearly 20 years in office. 

Sen. Chuck Schumer (D-N.Y.) on Wednesday introduced legislation that slaps a $0.25 excise tax on companies that transfer domestic customer service calls to foreign call centers. The bill's chief aim is to stem the outsourcing of jobs.

"If we want to put a stop to the outsourcing of American jobs, than we need to provide incentives for American companies to keep American jobs here," Schumer said in prepared remarks. "This bill will not only serve to maintain call center jobs currently in the United States, but also provide a reason for companies that have already outsourced jobs to bring them back."

Sen. Chuck Grassley (R-Iowa) criticized the Obama administration and Democratic leaders in Congress for touting the COBRA subsidy as a special tax incentive for small businesses when it actually benefits former employees who no longer receive financial aid from employers for health coverage. 

"[The] IRS is telling small business that the government subsidy provided to former employees electing COBRA health coverage is a 'special tax incentive for small business," Grassley said in prepared remarks. "This is a complete mischaracterization." 

Grassley is the ranking member on the Senate Finance Committee and argues CORBA aids former employees by subsidizing their cost for health coverage and not the company that used to employ them. 

"A small business gets no benefit," Grassley said, adding, "The administration should be honest with small business."

Manufacturing grew for the 10th straight month, outpacing forecasts in May, signaling a strengthening economy, according to a report released Tuesday. 

The Institute for Supply Management's gauge fell to 59.7 last month from 60.4 in April but still exceeded most forecasts. Readings greater than 50 reflect economic expansion. 

The demand for exports caused factories to ramp up hiring as 12 of 18 industries reported growth and the employment index rose 1.3 percentage points to 59.8 percent in May, the sixth consecutive month of growth in manufacturing employment. An employment index above 49.8 percent represents growth.

Improved manufacturing and construction numbers didn't provide enough of a boost for stocks Tuesday, as the Dow Jones industrials tumbled late in the day, finishing down 112 points, or 1.11 percent to 10,024.