Pascrell Votes To Provide Relief To Economically Struggling Families, Businesses And Supports Cracking Down On Overseas Tax Evaders
Keeping with the U.S. House of Representatives leadership's mission to create jobs, U.S. Rep. Bill Pascrell, Jr. (D-NJ-8) voted in favor of the Tax Extenders Act of 2009 (H.R. 4213), which passed in the House today with a vote of 241 to 181.
"This legislation gives the advantages of tax credits and deductions to the people, communities and businesses that need it most," said Pascrell, a member of the Congressional Task Force on Jobs Creation. "The passage of this bill will help provide a pathway to new industries and job opportunities that will become the hallmarks of the 21st century economy."
As the nation's economy recovers from the economic crisis, this legislation includes several provisions that will encourage companies to invest in new technologies and hire more workers.
H.R. 4213 will extend the research and experimentation (R&E) tax credit for another year for nearly 11,000 corporations, encouraging businesses to increase investments in technology and create more high-tech jobs for the 21st century. Approximately 70 percent or more of the benefits of the R&D tax credit are attributable to salaries of workers performing U.S. based research and the credit stimulates American-made innovation in all 50 states.
The legislation also extends the tax credit for biodiesel and renewable diesel, providing clean energy companies with the certainty they need to make critical investments in the Nation's energy future. The Administration is also pleased with the extension of the new markets tax credit. Since its establishment in 2000, this credit has stimulated private investment in economically depressed communities, helping to build schools and health care facilities as well as providing entrepreneurs with the resources to succeed.
Tax relief included in the legislation total $31 billion: $5 billion for individuals, $17 billion for business, and $3.4 billion for strengthening communities.
"This bill is further proof that this Congress is serious about growing our economy and cutting the national deficit. One of the greatest strengths of this bill is that its tax cuts will be paid for through the strict federal enforcement of our tax laws," said Pascrell. "No one should be able to dodge their obligations to this country and their fellow Americans through loopholes and offshore accounts."
The credits and deductions are to be paid for by ending preferential tax treatment for investment fund managers and combating offshore tax evasion. The legislation would fulfill the Obama Administration's commitment to find and prosecute U.S. individuals that hide assets overseas from the Internal Revenue Service. In order to prevent this tax evasion, the bill would require new reporting by foreign financial institutions to give the IRS more data to detect fraud and tax evasion.
The bill also closes tax loopholes that allow investment fund managers to pay a lower tax rate than other Americans. Investment fund managers would be taxed at ordinary income rates for the service income they receive as compensation (carried interest). The bill would continue to tax carried interest at capital gain tax rates (15 percent) to the extent that the carried interest reflects a reasonable return on invested capital. The bill would not affect other investors in these funds and would not affect the tax rate on profits that fund managers make on investments with their own money.