Tax Provisions in the Bailout Legislation

Like millions of Americans, I have been glued to the news and television trying to get a handle on the bailout. Television gives you just a brief recap and no major details. The newspapers give their spin on the events but have left me still seeking more information.

I decided on go online and surf for the facts. Here is some of what I found, but I’ll have to tell you, I’m still in the clouds. See if you can get a better understanding.

The Emergency Economic Stabilization Act, the bailout package for the financial services industry, adds an enormous variety of tax credits, tax deductions, extensions, and even a few tax hikes. I imagine there's at least one tax change that affects you in the final version of the bill that was passed by both the Senate and the House.

The final version of the financial industry bailout plan has added in a wide array of tax breaks, and tax increases, for businesses and individuals of all types. "Taken as a whole, the Senate tax package would cost $150.5 billion over 10 years. Of that amount, about $43.5 billion would be offset" with tax increases according to the New York Times.

The Emergency Economic Stabilization Act (HR 1424) passed the Senate on October 1, 2008, by a vote of 74 in favor to 25 against. Here's the roll call of the Senate vote showing who voted for and against the bill.

The House of Representatives passed HR 1424 on October 3, 2008, by a vote of 263 in favor to 171 against. Here's the roll call of the House vote. "The bill now heads to President Bush who is eager to sign it," reports the New York Times. President Bush signed HR 1424 into law later the same day.

The legislation would provide the Treasury Department with the ability to "purchase, insure, hold, and sell a wide variety of financial instruments, particularly those that are based on or related to residential or commercial mortgages" and would increase the insurance for bank deposits under the FDIC and the NCUA. (Quote from Senate financial rescue legislation, Congressional Budget Office blog.)

The legislation also change a wide variety of tax laws relating to executive compensation in the financial industry, tax breaks for energy efficiency and transportation, tax relief for taxpayers affected by disasters, and a long list of tax provisions that would impact nearly every taxpayer. Here are highlights of tax provisions that impact individual and self-employed taxpayers.
Here is a list of links that I researched and may provide you with more information:

·Full text of HR 1424 and other legislative information (Library of Congress)
·Staff Summary of the Tax Proposals in the Emergency Economic Stabilization Act of 2008 (Senate Finance Committee, pdf, 2 pages)
·Staff Summary of the Energy, Extenders, AMT and Disaster Tax Provisions in the "Emergency Economic Stabilization Act of 2008" (Senate Finance Committee, pdf, 27 pages)
·Emergency Economic Stabilization Act downloads from the Senate Banking Committee
·Summary from CQ Politics
·Summary from Don't Mess with Taxes
·Summary from the New York Times
·Roll call of the Senate vote on HR 1424
·Senate financial rescue legislation (budget analysis from the Congressional Budget Office)
·Behind the Economic Bailout
·How the Economic Bailout Affects You

If you’re have troubling picturing or even understanding what $700 billion looks like, Jess Bachman over at WallStats.com has this breakdown of what it might take to raise $700 billion from American taxpayers.

Good lucks folks, no matter how they word it, taxpayers are and have already been paying for the financial world’s expertise, if that is what you want to call it. Where I come from it’s called Corporate greed and power.