Congress Passes War Spending/Minimum Wage/Small Business Tax Relief Legislation

The House on April 25, 2007, by a vote of 218 to 208, and the Senate on April 26, 2007, by a vote of 51 to 46, approved the conference report for the U.S. Troop Readiness, Veterans' Health, and Iraq Accountability Act, 2007 (HR 1591). Tax provisions included in the legislation would extend the Work Opportunity Tax Credit, expand the Code Sec. 179 expensing election, waive the alternative minimum tax limitations on the work opportunity tax credit and with respect to cash tips, simplify family business tax reporting, extend or expand several Katrina-related tax provisions, and add several Subchapter S provisions. Revenue offsets include a further increase in the kiddie tax age, a change in the collection due process procedures for employment tax liabilities, a change in the time for payment of corporate estimated taxes, and a variety of changes in interest, penalties and user fees.

President Bush has promised to veto the legislation due to deadlines of Iraq troop withdrawals and the inclusion of unrelated provisions in a supplemental war spending bill. Congressional and Administration strategies following the promised veto are not clear.