The construction industry was also victorious: a measure to repeal the foreign income exclusion was dropped from the final plan. Construction and engineering firms had lobbied extensively to remove the provision included as a revenue raiser in the Senates plan that would have reversed Section 911 of the tax code that allows workers to exclude up to $80,000 of income earned overseas. Industry firms argued that it would be burdensome to send workers to help rebuild Iraq and Afghanistan if their income would be taxed by both the foreign country and the U.S.
The Senate is expected to vote on the measure today to meet Bushs request to have a tax bill signed by Memorial Day.
The compromise plan, approved 231-200, will lower the tax rate on dividend income and capital gains to 15%. The measure also includes incentives for business investment, including the purchase of certain equipment.he House passed a $350-billion compromise tax cut package in the early hours of May 23, giving President George W. Bush a victory he hopes will boost the economy.