Senate Finance Chairman Max Baucus today unveiled a slimmed-down "extenders" package that would postpone Medicare physician payment cuts only through November, down from 19 months. It also softens tax increases affecting S corporations and investment fund managers to ease concerns of senators on both sides of the aisle. Fund managers would be able to treat half of their income as capital gains if assets are held for at least five years, for example, a boon to venture capital firms.
But private equity fund managers would pay higher taxes, as in the House-passed bill, as gains on assets sold within five years would be subject to 75 percent ordinary income tax treatment. Baucus said more than half of the bill is offset, giving deficit-conscious senators a reason to vote for it. The amendment also removes $25 a week in extra unemployment compensation laid-off workers have been receiving since the stimulus was enacted last year.