SENATOR COLLINS WORKS WITH COLLEAGUES TO PROVIDE TAX RELIEF TO LOW AND MIDDLE-INCOME FAMILIES
Bill Also Includes Extension of Sen. Collins-Authored Teacher Tax Credit
WASHINGTON, DC-(Statement Embargoed Until Final Passage)-The US Senate tonight passed, with bipartisan support, legislation that will extend tax relief provisions, which are important to low and middle-income families throughout the nation. Without this extension, millions of working Americans and families would see their income taxes increase next year. The legislation includes an extension of a law written by Senator Collins in 2001 that provides a $250 tax deduction for teachers who purchase classroom supplies with their own funds.
Senator Collins has released the following statement with regard to the bill:
"I support extending tax relief that is critically important to low and middle-income families throughout the nation, including hundreds of thousands of Maine's working families. It is of paramount importance that we act to prevent increased taxes for the families who need tax relief most.
"In 2003, Congress passed tax relief legislation that has made a real difference to the American economy and to the lives of millions of working American families. This legislation provided working couples with relief from the marriage tax penalty; it provided a per child tax credit of $1,000, and it expanded the 10 percent tax bracket to provide more relief to hard-working families. But unless these important tax provisions are extended this year, working families will see their taxes increase next year.
"More than 300,000 Mainers benefit from maintaining the 10% tax bracket at the current income levels of $14,300 per family, and $7,150 per single taxpayer. If we failed to pass legislation extending the 10% tax bracket, taxpayers with incomes beneath these levels would be subject to a 15 percent tax. That would be irresponsible, and unfair to very low-income taxpayers who are already struggling to make ends meet.
"It would also be unfair to allow relief from the marriage tax penalty to be eroded. Over 170,000 Maine couples benefit from the marriage tax penalty relief we passed last year. If we fail to act now to continue that relief, these couples will lose the benefit they deserve - an unnecessary and unfair penalty on working couples.
"Likewise, we cannot allow the increase in the child tax credit to expire. Nearly 120,000 Maine families claim the child tax credit, and stand to lose $300 per child if we do not act.
"Continuing this imperative tax relief is important to low and middle-income families in Maine and throughout the nation. These provisions promote a fair and progressive tax policy."
"In addition, this tax bill makes sure that our lowest-income working families benefit through an expansion of the refundable child credit. Under this provision, many families that do not have enough tax liability to claim the full $1000 tax credit per child will still be eligible for a refund. Nearly 12 million children throughout the nation-and many thousands of Maine families-will benefit from this provision.
"Finally, I am also very pleased that this tax package includes an extension of the $250 deduction provided to teachers who purchase supplies for their classrooms with their own funds. This is a modest, but appropriate, step toward recognizing the invaluable services that teachers provide each and every day to our children." Major provisions of the bill are as follows:
It extends for five years relief from the marriage penalty, the $1,000 child tax credit and the expansion of the 10 percent tax bracket.
It provides for a refundable tax credit, retroactive to 2004, for the lowest income Americans, may of whom do not pay income taxes.
The bill provides assistance for military families by allowing them to include non-taxable combat pay in the calculation of the amount of the refundable child tax credit they may claim.
It maintains the $250 tax deduction for teachers who spend money out of their own pockets on classroom supplies and equipment.