On May 28, the House of Representatives passed the American Jobs and Closing Tax Loopholes Act (H.R. 4213) by a vote of 215–204. The bill now goes to the Senate, which will not take it up for consideration until after it returns from its Memorial Day recess on June 7.
The bill as passed by the House extends a large number of expired tax provisions through 2010. These include the Sec. 41 research credit, the standard deduction for state and local property taxes, and the deduction for state and local sales tax.
As a revenue raiser, the bill would change the tax treatment of investment fund managers’ carried interests. These are currently taxed as capital gains, but under the bill 50% of carried interests would be taxed at ordinary income tax rates through 2012. After that, 75% would be taxed as ordinary income.
The House version of the bill differs from the version of H.R. 4213 passed by the Senate in December, and it is expected that the Senate will introduce further changes before voting on the bill.