Senate drops effort to extend tax break for capital gains

NATION DIGEST

Nation Digest

November 16, 2005|By LOS ANGELES TIMES

WASHINGTON -- Senate tax writers dropped an effort yesterday to extend one of the tax cuts President Bush strongly supports, underscoring a growing rift in the Republican-controlled Congress.

The Senate Finance Committee left out of a $60 billion tax-cut measure an extension of a dividend and capital gains tax cut due to expire at the end of 2008.

The action sets up a likely showdown with the House of Representatives, where GOP leaders support extending the lower tax rate for income derived from investment profits.

It was the most recent dispute within Republican ranks, as lawmakers facing re-election campaigns break from a president whose poll ratings are sliding. In the House, a budget-cutting bill is hung up by an internal GOP fight.

The tax bill could reach the Senate floor today. An effort is expected to be made to rescind tax breaks provided to the oil industry -- a response to the public furor over record oil industry profits.

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