Tax bill aids Alaska $84 million worth

Posted: Sunday, May 25, 2003

FAIRBANKS (AP) Alaska will get an $84 million boost as part of a $350 billion tax cut approved by Congress last week.

In addition to a variety of tax cuts for individuals and businesses, the bill aids state governments with grants and a boost in Medicaid funds.

Alaska will get $34.1 million extra in Medicaid money under the bill, in addition to grants that total $50 million.

That $84 million should help the state deal with its fiscal gap, Alaska Sen. Lisa Murkowski told the Fairbanks Daily News-Miner.

Language sought by Alaska Sen. Ted Stevens, which would have directed about $9.4 million to Alaska's hospitals through Medicare during the next 10 years, was struck from the final version by the House-Senate conference committee.

The bill passed the Senate 51-50, with Vice President Dick Cheney casting the deciding vote. The House bill passed 231-200. President Bush is expected to sign it.

Democrats noted during the debate that most of the tax cuts, which are spread over the next decade, would go to wealthier Americans. And some cuts that would benefit average Americans the most, such as a $1,000-per-child tax credit, are scheduled to disappear before the 10 years is up.

Sen. Murkowski tried last month to bump up the Senate's budget resolution to make room for a $1,000 child tax credit through 2013. Democrats successfully shot down her effort, noting that nothing in her amendment guaranteed that the room she proposed to make in the budget resolution would be used for the child credit.

Republicans said the tax cuts benefit wealthier Americans more than low-income Americans, in total dollar terms, because the wealthy pay most of the taxes. The Republican proposal virtually eliminates taxes on lower-income and some middle-income Americans, they argued.

Murkowski noted Friday that the bill pushes federal income taxes down to just $45 for couples who make $40,000 and have two children. The income tax disappears for those earning less.

The bill implements reductions in the income tax rates sooner than had been scheduled under a tax cut bill passed at Bush's request soon after his election.

''Accelerating the tax cuts we originally passed in 2001 will be of tremendous assistance to the American family,'' said Rep. Don Young in a news release Friday. ''This package will allow taxpayers to keep more of their hard-earned dollars, and give them the opportunity to save, invest and spend it as they see fit.''

Murkowski co-sponsored the amendment last week that will send $20 billion to the states through Medicaid and various grants.

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