Following are details of an alternative proposal to boost the struggling U.S. economy that Republicans in the House plan to offer during debate Wednesday.
The cost of their proposal is approximately $478 billion. Cut the lowest two income tax rates for 2009 and 2010, from 15 percent to 10 percent and from 10 percent to 5 percent. Extend through 2010 a patch to the Alternative Minimum Tax, which was originally designed to ensure that wealthy people pay taxes, but instead would hit millions of middle-income families with higher taxes. Expand the $7,500 first-time homebuyers tax credit for a principal residence to all homebuyers while limiting it to purchasers who can make a down payment of at least 5 percent of the purchase price. Provide a tax deduction for small businesses with less than 500 employees equal to 20 percent of their income. Offer new tax deduction for those who do not receive tax-preferred, employer-sponsored health care coverage. And provide assistance to the unemployed who do not qualify for a COBRA premium subsidy. Give tax exemption on unemployment benefits and extend temporary federal unemployment benefits through 2009, phasing it out through mid-2010. Allow companies to write off current losses against previous tax years for up to five years. Companies now can only "carry back" losses for two years. The tax break would not be available to banks and other companies receiving help from the $700 billion bailout package. Extend through 2009 a break for small businesses that allows them to immediately write off up certain capital expenditures.
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