Don't Mess With Taxes

The Senate just passed the tax reconciliation bill I synopsized here.

Technically, the president has to sign it into law, but that's as sure a bet as you're ever gonna get.

So now we can all rest easier knowing that some of us have new, expanded tax breaks. As promised, in the days to come I'll examine the provisions and what they mean to taxpayers.

But the tax watch continues. Congress still has to deal with the "trailer" bill, which probably will be tacked onto pension legislation.

House Ways and Means Committee Chairman Bill Thomas, R-Calif., told tax publisher CCH that this second round of tax changes would likely include the deduction for state and local sales taxes, as well as "a host of business and personal tax provisions that have broad bipartisan support, such as the research and development tax credit, a deduction for teacher's classroom expenses and a second year of alternative minimum tax relief."

This first tax measure was seen by some, read Democrats, as too skewed toward wealthy taxpayers. The votes reflected that, with most toeing party lines.

In the House, only two Republicans voted against the bill; 15 Democratic senators crossed over to vote for it. Across Capitol Hill, two Senators from each party switched sides in today's vote.

Look for more Dems to support the trailer bill, whose measures are generally perceived as more helpful to the average taxpayer.

In an election year, that's not necessarily ammunition that the Republican faithful want to hand the Democrats. But blocking such tax relief, even if it's just until after the election, could be more even more damaging.

I repeat. Stay tuned!