Senate Democrats Unveil Fund-Manager Profits Tax Boost

The topic of the fund-manager tax has not been a stranger to my blog over the past couple weeks. Now, Senate Democratic leaders are proposing some differences from the proposal passed by the House last month. According to the Wall Street Journal, the investment fund-manager tax is part of a broader $140 billion package to extend jobless benefits and expired tax breaks the Senate began debating Tuesday. The broader bill would extend unemployment benefits to November 30 of this year, extend business tax breaks, such as the research credit, for one year, and prevent a cut in Medicare payments to doctors. It also includes funding for state and local infrastructure projects.

Other differences from the House bill according to the article are:

• Senate Democrats decided not to include in the House bill a plan to require greater fee disclosure to workers who participate in 401(k) retirement plans, which was opposed by mutual-fund companies.
• Senate Democrats are proposing to extend generous aid to states that was approved in last year's stimulus legislation. The Senate bill would extend that aid for six months, through June 30, 2011, at a cost of $24 billion.
• The Senate proposal also increases a per barrel tax on oil produced in or imported into the U.S to 41 cents from eight cents per-barrel. The difference? The House-passed bill would have increased that tax to 34 cents a barrel.
• The large Senate package also includes $1 billion for a federal youth summer jobs program and $4.6 billion to settle lawsuits that black and Native American farmers have brought against the government.
• About $58 billion of the $140 billion cost of the package is offset by targeted tax increases, including the fund-manager tax and new curbs on the ability of U.S. multinationals to use foreign tax credits.
• That means the package would add roughly $82 billion to the deficit over 10 years, compared to $60 billion under the House-passed bill.

The Senate will consider additional amendments to the bill, and a final vote isn't expected until next week or later.

Read the full article here.