Tax Relief for America's Families
DATE: October 1, 2004
Recently, the House passed the Working Families Tax Relief Act, legislation that ensures that 93 million American taxpayers and their families don't wake up to a major tax hike on Jan. 1, 2005, as a result of a sunset provision in previous tax legislation.
The legislation that we approved extends family friendly tax provisions previously passed by Congress. The marriage penalty relief is extended through 2010, preventing a tax hike on the approximately 27 million taxpaying couples, the expanded 10-percent income tax bracket is extended and the $1000 child tax credit is also extended. Without action, America's families will face a $109 billion tax increase over the next 10 years-an average increase of $565 per person next year.
The legislation also provides critical assistance to military families in combat zones-a particularly appropriate measure given the times in which we live. The bill increases the child credit for military families and increases the Earned Income Credit (EIC) giving them the option to include combat pay.
This legislation also provides long overdue uniformity in the definition of 'child' for tax purposes-something which is critical for many elements of the code, among them the child credit, dependency exemption and head of household filing status.
The bill also extends relief from the Alternative Minimum Tax through 2005-without this provision, more middle income folks will be pushed into paying this tax.
Finally, this bill extends several other annual expiring tax provisions, including things like the research and development tax credit, thereby providing $13 billion of tax relief over the next 10 years.
Anytime we can establish fairer and lower taxes on working families then we are assisting the national economy, creating jobs and increasing opportunity across the country. The recent announcement that America's Gross Domestic Product (GDP), which measures the rate of production in the United States, rose at an annual rate of 3.3% for the second quarter is a solid indicator of economic health, and further evidence that previous tax relief measures are working.
When we lower the tax burden on America's families, it encourages investment, savings and general entrepreneurship, rather than exacting a price on productivity. It is both unwise and unfair to punish hard-working Americans for their industriousness.
Following House passage, this legislation moves to the Senate, which is expected to take up the measure in the near
future. President Bush has already indicated that he will sign it into law, which is good news for America's families.