Ryan Votes to Prevent Tax Hikes
December 8, 2005
Bill Contains Ryan's Legislation to Enable Wisconsin to Continue Veterans' Home Loan Program
WASHINGTON - First District Congressman Paul Ryan today voted for legislation that prevents harmful tax increases on families and small businesses by extending an array of current-law tax relief provisions that are scheduled to expire in the near future. The bill also contains a provision authored by Congressman Ryan that would enable Wisconsin to continue its special mortgage loan program for veterans. The legislation - H.R. 4297, the Tax Relief Extension Reconciliation Act - passed in the full House of Representatives by a vote of 234-197. The Senate passed a different version of tax reconciliation legislation last month, and the next step is a House-Senate conference to resolve differences on this bill.
"Wisconsin's home loan program for veterans has helped many achieve the dream of owning their own home, and we want to keep this successful program going," Ryan said. "Wisconsin veterans who are returning from Iraq or Afghanistan today deserve the same access to homeownership that earlier veterans enjoyed. The veterans mortgage loan measure that we included in today's bill makes it possible to extend Wisconsin's special loan program and open it up to assist recent veterans."
"I also support this overall package that will prevent tax hikes on Wisconsin families and businesses by extending expiring tax relief. The last thing Wisconsinites need right now are tax increases, but that's what will happen if we let the tax relief expire over the next few years," Ryan said. "Since Congress lowered taxes on investment in 2003, our economy has grown and created 4.4 million jobs, and revenues have risen too, helping us to reduce the deficit. Raising taxes now would put the brakes on economic growth and hurt our ability to tackle the deficit."
Under current law, Wisconsin and four other states are authorized to issue tax-exempt bonds, the proceeds of which are used to finance mortgage loans to veterans. However, these mortgage loans can be made only to veterans who served on active duty before 1977 and who applied for the loan within 30 years after they left active military service. Therefore, veterans of more recent or ongoing military operations such as Operation Iraqi Freedom, Operation Enduring Freedom, Kosovo, Somalia, and the 1991 Persian Gulf War are not eligible, under present law, for such mortgage loans.
Ryan's provision, included in the House-passed H.R. 4297, removes the requirement that veterans receiving loans financed by these veterans' bonds must have served before 1977, enabling Wisconsin's veterans' home loan program to stay active and assist Wisconsin veterans of Iraq, Afghanistan and other more recent conflicts.
Additionally, the legislation provides new state limits for these bonds. Under this measure, the new bonding authority for Wisconsin to provide these loans would be phased in over five years and would sunset in 2010.
Overall, H.R. 4297, the Tax Relief Extension Reconciliation Act, provides one- and two-year extensions of a range of tax relief provisions that are scheduled to expire within the next few years if no action is taken by Congress. Among these current-law tax policies are enhanced small business expensing and capital gains and dividends tax rates. This legislation would extend for two years (through the end of tax-year 2009) the ability of small businesses to deduct in the first year up to $100,000 of investments in depreciable assets. It would also maintain the current capital gains and dividend income tax rates through 2010, rather than letting these expire (and raise taxes) at the end of 2008.
As a result of the 2003 tax relief, which reduced tax rates on capital gains and dividends, our economy has experienced significant growth and the federal government has seen a substantial increase in revenues. After witnessing declines in revenues from 2000 through 2003, revenues surged in 2004 and 2005. For 2004, revenues were up by 1.9% from individual taxes and 43.7% from corporate taxes. For 2005, revenues were up by 14.6% on the individual side and 47.0% on the corporate side. As a result of this growth in tax revenue, the Office of Management and Budget's (OMB's) deficit projections for 2004 and 2005 went down. In 2004, OMB projected a deficit of $521 billion. The actual deficit was $412 billion. For 2005, OMB projected a budget deficit of $427 billion, but it recently reported the actual deficit to be $319 billion - a decrease of 25% over this year's initial projection.