-Caveat Lector- House Stimulus Bill Would Give Billions to Huge Companies; Democrats Say Its Too Generous
By CURT ANDERSON AP Tax Writer WASHINGTON (AP) -- General Motors, IBM and Kmart are among corporations that would receive billions of dollars in tax refunds under a $100 billion House Republican economic stimulus package. Democrats say it is far too generous to companies and does too little for individuals. Seven companies would get a total of $3.3 billion in refunds of alternative minimum taxes they paid as far back as 1986. The tax, which the House legislation also would repeal outright, is intended to ensure a basic minimum income tax is paid by companies and individuals that claim numerous deductions and credits. IBM would get a $1.4 billion refund, according to the nonpartisan Congressional Research Service, while GM would get $832 million, Kmart $102 million and General Electric $671 million. Others specified for big refunds include energy giant Enron, at $254 million; U.S. Steel, $39 million; and grocery chain Kroger, $9 million. In addition, the study found that Ford Motor Co. [NYSE:F - news] would get a refund that could total $2.3 billion, while Chevron's could reach $314 million. Counting repeal of the tax, corporations would get more than $25 billion in tax relief from these minimum tax provisions in 2002 alone. In addition, the bill would make permanent a temporary tax break for financial services firms doing a lot of overseas business, providing them $21 billion in tax relief over 10 years. The generous corporate tax breaks are among the most contentious items in the House GOP measure, scheduled for a floor vote Wednesday. Democrats say the measure is certain to change once it reaches the Senate; the Bush administration also has signaled that $100 billion is too costly. ``It's clear the House bill cannot pass the Senate as it is,'' said Sen. John Breaux, D-La. For individuals, the House legislation includes a new round of tax rebate checks for workers who didn't get them this summer and a cut in the current 27 percent income tax rate to 25 percent in 2002, four years earlier than under the just-enacted tax cut. The measure also reduces capital gains rates from 20 percent to 18 percent for most taxpayers, enhances business equipment write-offs and allows companies to deduct current losses against taxes paid five years earlier. The primary sponsor, Ways and Means Committee Chairman Bill Thomas, said in a newspaper opinion piece published Tuesday in USA Today that the legislation ``is a shot of adrenaline'' that will help restart the economy while not triggering inflation. ``Businesses generate jobs, and jobs are the core of a strong economy,'' wrote Thomas, R-Calif. While bipartisan support backs some of the House items, Senate Democrats have been pushing for expanded unemployment benefits and help for workers who lose health insurance. Sen. Max Baucus, chairman of the Senate Finance Committee, presented a $70 billion proposal Tuesday that would extend unemployment benefits by 13 weeks, provide a 50 percent federal match for COBRA health insurance policies and allow more workers to qualify for Medicaid. The legislation also includes rebate checks and some business items similar to the House bill but not the capital gains reduction or the alternative minimum tax relief. Tax cuts in the Baucus measure would total $35 billion in 2002, far below the House GOP level. ``This proposal appropriately responds to the sign of the times, helping this nation get back to work and recover quickly,'' said Baucus, D-Mont. But Treasury Secretary Paul O'Neill, who has been the Bush administration's point man in stimulus negotiations, said he was ``disappointed'' in the Baucus proposal. He said it contained $50 billion in new spending instead of focusing more on tax cuts. ``This is a spending package, not a stimulus package,'' O'Neill said. Other Democrats were working on still more spending programs. Senate Appropriations Committee Chairman Robert Byrd, D-W.Va., said he was putting together a $20 billion package that included hiring extra customs and border agents and food inspectors, augmented security at nuclear plants and purchase of more vaccines. Sen. Charles Grassley, R-Iowa, said President Bush does not want the stimulus bill laden with additional spending. ``Everything in this package needs to be stimulative,'' Grassley said. ``There needs to be more done on the investment side.'' Steve Wingate, Webmaster ANOMALOUS IMAGES AND UFO FILES http://www.anomalous-images.com <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! 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