Tax Relief for the Middle Class

TAX RELIEF FOR THE MIDDLE CLASS

Do you feel that your economic future is bright?

If not, you are among the growing numbers of America's middle class working families struggling to get ahead as wage gains slow and benefits disappear.

Expenses for child care, college tuition, and taking care of elderly parents add to financial pressures. Many Americans borrow to make ends meet. To make matters worse, more middle class families face the Alterative Minimum Tax.

I am co-sponsoring a bill called "The Middle Class Opportunity Act of 2007" which targets tax relief at middle class families.

Families with Young Children

According to the U.S.D.A., a middle-class family earning between $43,200 and $72,600 annually will spend more than $20,000 on a newborn child before the age of two. This bill doubles the existing child tax credit from $1,000 to $2,000 in the first year of a child's life. Families that adopt can take advantage of this expanded credit for the first year following the adoption.

Under current law, the Dependent Care Tax Credit, which offsets a portion of childcare expenses, equals 35 percent of qualified expenses for lower-income families and is reduced to 20 percent for families earning between $43,000 and $75,000.

My bill would increase the child tax credit to a full 35 percent for middle class families earning up to $75,000. Higher-income families would qualify for a reduced credit.

Higher Education Costs

This bill simplifies existing tax credits and deductions for higher education and expands access to college for millions of families by consolidating the current Hope and Lifetime Learning credits and the college tuition deduction into one easy-to-understand tax credit.

It includes expenses for tuition, fees, and textbooks; can be used for up to three students in the household; reaches a maximum of $2,500 per student based on a sliding scale; allows the credit to be used for undergraduate and graduate education; and starts phasing out at income levels of $70,000 (single) and $140,000 (married).

Caring for Aging Parents

Seventy percent of people between the ages of 45 and 55 have at least one living parent, and almost half the women in that age range provide some support to an aging parent. About half the caregivers contribute an average of $200 a month. This bill would expand the number of families who qualify by allowing them to claim the credit even if the parent does not live with them.

Relief from the Alternative Minimum Tax

The Alternative Minimum Tax was meant to make sure higher income individuals paid their fair share of taxes. The problem is, this tax wasn't indexed for inflation and many middle income families find themselves paying a tax originally intended only for the wealthy.

The President's budget extends the current Alternative Minimum Tax "patch" through 2007; it leaves out 20 million taxpayers that will be pulled into the tax in 2008 if nothing is done.

This bill extends the patch through 2008 potentially saving families with incomes between $75,000 and $100,000 a tax increase of nearly $1,000.

Tax Cuts are Good for America

As Nebraska's Governor I cut taxes, balanced 8 straight budgets, and left the state with a general fund balance of $300 million. As Nebraska's Senator I have voted for 6 major tax cuts. It's time to stand up for tax cuts targeted directly at the middle class to help them balance work and family, save for retirement, and contribute to America's economic growth.

http://bennelson.senate.gov/news/details.cfm?id=270476&&