Grassley Helps to Advance Family Tax Cuts, Alternative Energy Tax Incentives
WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, todayurged Congress to give final approval to continued tax relief for millions of families and individualsand continued tax incentives for renewable energy production. Grassley played a critical role inadvancing the tax measures as chairman of a House-Senate conference committee overseeing theirapproval.
“The choice is between increasing taxes on millions of families and individuals next yearor sparing them that tax increase,” Grassley said. “I’m glad those of us who fought for tax relief –the Republican-led Congress – are prevailing. Taxpayers deserve it. The President made this apriority, and I hope to have a bill on his desk within days. I’m also glad to continue our commitmentto making electricity using renewable resources. We still have to pass a comprehensive energy bill,but in general, cutting taxes is an effective way to encourage positive, environmentally consciousmeans of producing electricity and fuel. I’m pleased all of these measures will pass with strongbipartisan support.”
Last night, the House-Senate conference committee charged with ironing out differencesbetween each chamber’s tax package approved Grassley’s proposals with no changes. Grassley saidthe package is must-pass legislation because without it, provisions dealing with the child tax credit,relieving the marriage penalty and providing an expanded 10 percent tax bracket would have expiredat the end of this year. Congress approved these provisions in earlier tax laws, also under Grassley’sleadership in the Senate. Specifically, the new tax package:
--- keeps the child tax credit at $1,000, instead of letting it drop to $700, for the next five years;it phases out at an income of $75,000 for a single taxpayer and $110,000 for a couple. Thetax package also ensures that families with a mother or father receiving tax-exempt combatpay will still be able to receive the maximum benefit from the child credit and the EarnedIncome Credit.
--- continues an expanded 10 percent tax rate that lowers tax bills for virtually all taxpayers forsix years. The 10 percent bracket – the lowest – is especially important for very low-incometaxpayers, who would feel the effects of a tax increase in this bracket more acutely thanhigher-income taxpayers.
--- continues to offer married couples relief from the marriage penalty that takes a bigger taxbite from many couples than if they were single taxpayers. This is extended for four years.
--- extends for one year current relief from the alternative minimum tax, which was intendedto make sure that wealthy Americans did not escape paying taxes but is starting to ensnaremore middle-income taxpayers.
--- creates a uniform definition of a child for the dependency exemption, child credit, the Earned Income Credit, the dependent care credit, and head-of-household filing status. This long overdue simplification makes many more taxpayers – especially low-income taxpayers --eligible for a child-related benefit. According to the nonpartisan Joint Committee onTaxation, this will be one of the most significant broad-based simplifications of the tax code.
--- extends the current tax credit for the production of electricity from renewable resources such as wind until Jan. 1, 2006. Grassley authored the Wind Energy Incentives Act of 1993, which established the first-ever wind energy production tax credit.
--- continues the full tax credit for electric vehicles and the full deduction for clean-fuel vehicles (powered by fuels including natural gas, electricity, or 85 percent or more ethanol) until2006.
This is the fourth significant tax cut package that the President has championed since takingoffice and that Grassley has helped to advance as a leader of the Finance Committee. The Housecould vote on the package as early as today, and the Senate could vote as early as tonight, clearingthe package for the President’s signature by early next week.
“The right path is the one that advances the economy and creates jobs,” Grassley said.“Raising taxes on families and individuals would take the country off the right path. I’m glad we’removing toward continued economic growth with a good tax package that makes sense for taxpayersand the economy.”
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