A new bipartisan initiative to overhaul the federal tax code is promising to help spur innovation in a number of sectors, including clean energy.
The House Energy and Commerce Committee is expected to introduce the tax reform plan this week.
The proposal would overhaul the tax code to create a permanent phase-out of the estate tax, which is imposed on estates worth over $5.25 million.
The proposal would also remove a $10,000 limit on the amount a taxpayer can claim as a tax deduction on their wages and salaries.
It would allow taxpayers to deduct their charitable contributions from federal income taxes as well.
Under the current tax code, taxpayers can deduct their wages from federal taxes up to $11,400 a year.
But under the proposal, they can deduct up to a maximum of $3,200 in state and local taxes.
Incentives for innovation could be a key part of the bill.
Incentives include incentives to invest in clean energy projects and research that would reduce emissions.
The bill would also create a new credit of up to 1.25 percentage points of the value of an asset, which would be used to help small businesses invest in the next generation of clean energy technologies.
A bipartisan group of senators is also considering a similar plan.
Democrats have argued that the estate and gift tax are regressive.
Republicans have said that the tax is only levied on the top 0.1 percent of earners, and they’ve also argued that it unfairly favors wealthy people and those who make their fortunes from the energy sector.
The White House and Congress have also argued the estate-tax deduction would be more than enough to pay for the bills in the long run.
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