Crenshaw Praises Passage of Capital Gains and Dividend Tax Relief Extension

Crenshaw Praises Passage of Capital Gains and Dividend Tax Relief Extension

2005-12-08

(WASHINGTON) - Congressman Ander Crenshaw (R-FL), a member of the House Appropriations Committee, today voted to extend crucial relief through 2010 on capital gains and dividend taxes by supporting H.R. 4297, the Tax Relief Extension Reconciliation Act of 2005. The bill also extends a provision vital to states with no income tax, such as Florida, that allows taxpayers to deduct sales tax in place of the state income tax. The legislation passed in the House by a vote of 234-197.

"This legislation will directly benefit the 57 million American families that either own individual stocks or own stocks through mutual funds and 401(k) plans," Crenshaw said. "Since enacting these tax reductions in 2003, we have seen the benefit to the U.S. economy. These lower taxes on business investment have helped create 4.5 million new jobs since May of 2003 and Florida has been among the leaders in new jobs added since that date."

Since the tax reductions on capital gains and dividends were passed in 2003, American stock markets have added nearly $4 trillion in value and dividends payments by U.S. companies surged to $213.6 billion in 2004, an increase of 33 percent over 2003. It is estimated that nearly 35 million Americans, many in the middle class and seniors, rely on dividend payments for some portion of their annual income. Dividend payments to shareholders have DOUBLED in two years and this tax relief has helped collected tax revenue reach record levels, providing a $120 billion reduction to the federal deficit in fiscal year 2005.

"Economic cynics refuse to believe this tax relief has benefited our economy or that anyone but the wealthy has been helped," added Crenshaw. "The numbers prove otherwise. Our economy has shown uncanny resilience recently and now is the time for the government to foster growth, not hinder it. Working Americans should be encouraged to invest in the markets they help drive everyday. Whether it is through stocks or other investments, no working American should be punished for trying to provide more for his or her family."

Crenshaw noted the following highlights of the Tax Relief Extension Reconciliation Act of 2005:

* Keeps the dividend and capital gains tax rates at 15 percent.
* Extends for one year a provision allowing taxpayers in states with no state income tax, such as Florida, to use sales tax paid as a federal deduction in lieu of the state income tax deduction allowed by the IRS.
* Encourages investment in American businesses, which is increasing nearly 50 percent faster than the long-term average since the cuts were first passed two years ago.
* Protects the more than 9 million seniors receiving dividend income.

http://crenshaw.house.gov/crenshaw-web/proc/?pa=universal&sa=showPr&itemId=283