President Bush recently was displeased with House Republicans for drafting a multi-year transportation bill that was more than his spending limits allowed.
Despite the lack of White House approval, legislators stuffed billions of dollars worth of tax breaks for business into the bill just before it was overwhelmingly passed by the House.
The tax cuts, which were inserted just before the bill went to the House floor, furnish relief to big companies from the Alternative Minimum Tax (AMT). They boost the amount of capital improvement write offsincluding computer software investmentsfrom $25,000 to $100,000.
The corporate AMT, part of the 1986 tax reform, is meant to insure that all corporations, even those with major deductions, pay some taxes. Softening the bite of that tax, however, has been a key priority for the biggest companies in the country, including auto makers and computer firms.
Changes approved by the House would allow multinational firms with extensive offshore operations to fully use foreign tax credits to lessen their tax liability.
Small-business groups, through their lobbyists, had fought for the expanded write-off provisions, that would permit a company to deduct the costs of certain improvements and equipment in a single year instead of depreciating them over a period of time.
The combined cost of the tax breaks over five years would be $12.8 billion, according to the Joint Committee on Taxation in Congress.
Source: The Washington Post