Additional Tax Relief May Be on the Horizon.

Recent budget numbers are projecting that the budget surplus will be lower than expected. As a result, additional large tax cuts are not expected, but Congress is still interested in trying to pass further modest tax relief measures before the end of the year. Senate Finance Committee Chairman Max Baucus (D-Mont.) identified several potential vehicles for additional tax relief measures including energy and health care legislation. However, Baucus said a bill to extend several tax provisions set to expire at the end of this year has the best chance of passage. Tax provisions that could be extended include the work opportunity tax credit, deferral for active financing income, and a tax credit for energy produced from wind and other renewable resources. Sen. Chuck Grassley (R-Ia.), now the ranking Republican on the Finance Committee, made similar comments about the potential for an extenders bill to succeed. In addition, Grassley raised the possibility of imposing add itional controls on corporate tax shelters as a means to create the necessary offsets that could pave the way for additional tax cuts this year.