Congressman Rohrabacher Votes To Extend Important Tax Relief Measures
Washington, Dec 8, 2005 -
Today the U.S. House of Representatives passed H.R. 4297, the Tax Relief Extension Reconciliation Act.
“Our economy continues to grow while jobless claims fall,” stated Rep. Rohrabacher. “It’s clear that the tax relief policies enacted in 2001 have allowed the economy to expand and provide more opportunity for the average American, at a lower level of deficit spending to boot.”
The tax relief legislation included one year extensions for:
- Personal tax credits, such as the dependent care, Hope and Lifetime Learning credits, to offset Alternative Minimum Tax (AMT) liability.
- Income tax deduction for State and local sales taxes.
- Research and development (R&D) tax credit. In addition to the extension, the credit is enhanced by providing an alternative method for calculating the credit.
- Above-the-line deduction for higher education expenses.
- Above-the-line deduction for out-of-pocket teacher classroom expenses.
- Authority to issue Qualified Zone Academy Bonds (QZABs) for school modernization, equipment and teacher training in high-poverty areas.
- Enhanced charitable deduction for computer donations to schools and public libraries.
- Work Opportunity Tax Credit (WOTC) for hiring individuals who face barriers to employment. In addition to the extension, the age limit for eligible food stamp recipients is increased from 25 to 35.
- Welfare-to-Work Tax Credit for hiring individuals who have received public assistance for an extended period of time.
- Incentives for business activity on Indian reservations
- Employment wage credit for hiring individuals who live on or near Indian reservations.
- Accelerated depreciation for business investment on Indian reservations.
- Fifteen-year depreciation period for restaurants and leasehold improvements.
- Availability of Archer MSAs (Medical Savings Accounts).
- Suspension of limit on percentage depletion for oil and gas produced from marginal wells.
- Tax incentives to revitalize the District of Columbia.
- Possession tax credit for American Samoa.
- Excise tax for enforcing mental health parity rules.
The bill allowed for two year extensions for:
- “Saver’s tax credit” for lower income workers who contribute to retirement savings accounts.
- Higher expensing limit and phase-out threshold under section 179 (i.e., small business expensing).
- Expensing of brownfield remediation costs. In addition to the extension, the definition of a contaminated site is expanded to include sites contaminated by petroleum products.
- Active financing exception under Subpart F so that domestic manufacturers and U.S.-based financial service firms can price long-term products competitively. In addition to the extension, the Subpart F exception is expanded.
- Reduced tax rates on capital gains and dividends.
“Republicans understand the efficiency and growth is found in the private sector, not the public sector,” stated Rep. Rohrabacher. “Extending these crucial tax cuts allows Americans to keep more of their hard-earned money and use it as they see fit rather than dumping into government coffers, many of which are plagued by waste, fraud and abuse.”