May
11, 2006
Washington, DC:
Congressman Ron Paul yesterday joined more than 240 of his colleagues in
the House of Representatives in voting to pass the Tax Relief Extension
Reconciliation Act. This
legislation was needed to prevent a tax
increase on small business owners, seniors, and married couples scheduled for
2006 and 2008. The bill centers on
averting tax hikes on capital gains and dividends, exempting ordinary taxpayers
from the alternative minimum tax (AMT), and helping small business owners by
extending the Section 179 expensing provision.
“Many
of the provisions contained in this legislation were necessary to avoid serious
tax consequences for millions of American taxpayers,” Paul stated.
“Dividend and capital gains tax relief is needed to encourage people to
save for their retirements, and the alternative minimum tax is especially
harmful. It was never intended to
apply to ordinary taxpayers. This legislation takes a small step toward easing
the burden on middle class taxpayers.”
Specifically,
the Tax Reconciliation bill:
-Extends the lower
15% rate for capital gains and dividend income for an additional two years.
Mutual fund holders who designate a portion of their dividends as capital gains
distribution also benefit from this provision.
-Prevents the AMT from ensnaring
more middle class taxpayers. It
creates a higher AMT exemption level for 2006 ($62,550 for joint filers; $42,500
for single filers). AMT relief is
the largest piece of the bill; 15 million middle class taxpayers otherwise would
be subject to AMT in 2006.
-Allows many non-refundable tax credits to be claimed against AMT,
including the mortgage interest credit, the Hope education credit, and the
Lifetime Learning credit.
-Extends the vitally important small business expensing deduction
(Section 179) at $100,000 through 2009.