Nelson Supports Major Tax Cuts
NELSON SUPPORTS MAJOR TAX CUTS
$70 billion in Cuts to Capital Gains and AMT, and Small Business Tax Cuts
Nebraska's Senator Ben Nelson today voted for his sixth major federal tax cut since being elected to the U.S. Senate. Nelson has supported every major tax cut and helped craft the 2001 tax cut that reduced federal taxes by more $1.3 trillion and the 2003 Economic Stimulus package that provided $20 billion in fiscal assistance to states, including $108 million dollars for health care and children's programs in Nebraska.
"I helped craft the 2001 tax cut and I have supported every subsequent tax cut to help stimulate economic growth. I support extending the capital gains tax cut and believe that extending the AMT tax cut is a major priority. I have a strong record of cutting taxes and I will support this tax cut package," said Ben Nelson.
According to new estimates released by the U.S. Treasury Department, 132,000 taxpayers in Nebraska have benefited from the reduced rates on capital gains and dividends.
The Senate passed the "Tax Increase Prevention and Reconciliation Act" today in a 54-44 vote. Major Provisions of the legislation are outlined below.
Major Provisions of Tax Increase Prevention and Reconciliation Act
Reduced Rates on Capital Gains and Dividends
Under current law and as a result of previous tax cut legislation supported by Senator Nelson, capital gains are taxed at a 15-percent rate. The rate will be reduced to zero in 2008 for taxpayers in the 10 and 15 percent tax brackets. Without action, the rate would increase after 2008. The provision extends the reduced rates for two years, through 2010, and will save taxpayers $20 billion over 5 years.
Individual Alternative Minimum Tax (AMT)
Under current law and as a result of previous tax cut legislation supported by Senator Nelson, the AMT exemption amount was increased to $40,250 ($58,000 for married couples filing jointly) through 2005 to prevent new taxpayers from becoming subject to the AMT. These increased exemption amounts expired at the end of 2005. The bill extends higher exemption levels though 2006 and increases them further to $62,550 (married) and $42,500 (individual), saving taxpayers $31 billion over 5 years.
Also, under current law, many non-refundable personal tax credits, such as the dependent care credit, the credit for the elderly and disabled and the Hope credit and Lifetime Learning credit for certain college expenses, are allowed for both regular income tax and for the AMT through 2005. The bill would allow the nonrefundable personal tax credits to continue through 2006, saving tax payers $2.8 billion over 5 years.
Increased Expensing for Small Business
Under current law and as a result of previous tax cut legislation supported by Senator Nelson, small businesses may expense (deduct in the first year) up to $100,000 of investments in depreciable assets. Without action, the expensing limit would have declined to $25,000. The bill extends the enhanced expensing levels through 2009, saving taxpayers $7 billion over 5 years.
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