WASHINGTON (AP) Legislation offering taxpayers a few dollars for giving to charity passed a House committee Wednesday after Republicans shrank President Bushs much more generous plan.
Democrats on the Ways and Means Committee took the opportunity to both ridicule the size of the tax cut about $4 per person at first, growing to $15 by 2010 and to scold the GOP for offering no way to pay for it.
This bill has been slimmed way down from what the president sought and talked about in the campaign, but still it needs to be paid for, said Rep. Earl Pomeroy, D-N.D.
The measure, approved on a party-line 23-16 vote, is part of Bushs faith-based initiative, and offers a variety of new tax breaks that would aid both religious and secular charities.
Its more controversial companion, which opens a slew of government programs to religious groups, cleared the Judiciary Committee last month, also on a party-line vote.
The two pieces will be joined and sent to the House floor, probably by the end of July but without the bipartisan support that Bush had hoped for.
The president welcomed the development. This legislation will stimulate more charitable giving and support faith-based and community organizations in their efforts to help those in need, Bush said in a statement
The heart of the tax bill allows people who do not itemize on their taxes to deduct up to $25 in charitable contributions meaning a maximum savings of $3.75 for most taxpayers. By 2010, that deduction would grow to $100 per person, or $200 per couple, making it worth about $15 per person.
Under the Bush proposal, taxpayers by 2010 would be allowed to deduct 100 percent of their contributions to charity, no matter how much they gave. The Joint Committee on Taxation estimated that would cost $84 billion over 10 years.
By contrast, the House version will cost just $6.4 billion.
White House spokesman Ari Fleischer welcomed the legislation as better than nothing.
The president is very pleased that for the first time since 1986, people who do not itemize on their tax forms will receive a charitable deduction, he said. Its not everything he asked for, but its much of what he asked for.
Combined with other measures, the entire package approved Wednesday is estimated at about $13 billion over 10 years.
To pay for the bill, Democrats proposed trimming back the tax cut for the wealthiest Americans that was just signed into law. That amendment was rejected on a party-line vote as well.
Democrats noted that there is only a limited amount of money remaining in the budget surplus. Given that Bush wants more money for defense, education and other areas, they said, theres not enough left to pay for new tax breaks.
Republicans responded that much of the promised spending was speculative. Committee Chairman Bill Thomas, R-Calif., noted that he had shrunk the cost of the bill to make it affordable.
At the same time, Democrats dismissed the tax break as too small to warrant a change in tax forms.
I dont know how you could possibly think this could be an incentive that would warrant the further complicating of our tax code, said Rep. Charles Rangel, D-N.Y.
Other elements of the bill, along with the cost over 10 years, would:
Allow taxpayers who are 70 1/2 and older to make charitable contributions from their individual retirement accounts without tax penalty: $2.2 billion.
Let corporations deduct more of their charitable contributions, capping them at 15 percent of taxable income, up from 10 percent: just under $1 billion.
Cut excise taxes for certain charitable foundations to 1 percent of net investment income: $2.2 billion.
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