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· Alternative Minimum Tax Reform

In a great showing of bipartisan support, the House of Representatives came together to pass the Stealth Tax Relief Act of 2005, H.R. 4096, by a vote of 414 to 4.

Without taking action, millions of middle income taxpayers would face a tax hike next year. The alternative minimum tax (AMT) was originally designed to tax the very rich, who were able to avoid paying taxes. Now, the AMT is reaching into taxpayers’ pockets who earn $50,000.

In 1999, the AMT affected only one million taxpayers, but will reach 33 million taxpayers by 2010.

Thirty-seven percent of middle class taxpayers filing with incomes between $50,000 and $75,000 will be affected by the AMT, and 73 percent of taxpayers with income between $75,000 and $100,000. Just three percent were being affected back in 1999.

For small businesses filing as S corporations or partnerships with income between $100,000 and $500,000 – 93 percent will be affected by the AMT.

By passing H.R. 4096, we have extended the current AMT exemption through 2006, as well as adjustments for inflation in the years beyond. This fix does not solve the entire problem of the AMT, but it does take steps to get the tax code under control.

For more information regarding H.R. 4096, please visit http://thomas.loc.gov.

· Tax Relief

On Thursday, the House of Representatives voted for tax relief, by passing the Tax Relief Extension Reconciliation Act of 2005, H.R. 4297. Without action, many taxpayers would see higher bills next year, because several current tax breaks would expire.

It is fairly simple, our country has benefited from ten straight months of economic growth, 215,000 new jobs created last month, and unemployment at a low five percent. Letting the current tax breaks expire, and raising taxes would not help us continue the growth in our economy.

Tax provisions that would be extended by H.R. 4297 include:

o Deduction for higher education expenses, whether or not the taxpayer itemizes;

o Deduction for teachers’ out-of-pocket expenses, whether or not they itemize;

o Work Opportunity Tax Credit, which employers get for employing people receiving assistance or food stamps and expands the WOTC up to age 35;

o Welfare to Work Tax Credit, which employers get for employing those on assistance;

o 15 year depreciation for restaurant improvements;

o Distributions from medical savings accounts;

o Full “percentage depletion” accounting method for independent oil producers;

o IRA tax credit “match” for those earning $25,000 ($50,000 for couples) or less;

o Small business asset depreciation limits;

o Reduced rates on capital gains and dividend income.

For more information on the Tax Relief Extension Reconciliation Act of 2005, please visit http://thomas.loc.gov.

Constituent Corner

· Farm Income Workshops

The University of Illinois Extension and the Department of Agricultural and Consumer Economics will be conducting the sixth annual Farm Income workshops in December.

These workshops are set to address some of the challenges for farm operators and owners, agricultural lenders, and managers of farm related businesses. There will be four general sessions offered: “Outlook for Commodity Prices”, “Illinois Farm Income Outlook”, “Run-Up to the Next Farm Bill”, and “Rising Input Costs: Implications for Crop Rotations and Cash Rent Values.”

If you are interested in attending any of these sessions, please visit www.farmdoc.uiuc.edu/farmincome/2006/farmincome2006.html.

· USDA Energy Council

Agriculture Secretary Mike Johanns recently announced the formation of the United States Department of Agriculture (USDA) Energy Council.

Amid concerns from farmers and ranchers about high energy costs, this council has been given the mission of examining departmental programs and authorities to ensure that they fit into a comprehensive energy strategy. They will also ensure that our farmers and ranchers have a voice in national energy discussions.

With the formation of this council, the USDA will have a better effort now to mitigate energy costs in the short term and work to ease energy related costs in the long term.

For more information on the USDA Energy Council, please visit www.usda.gov.

· Museum and Library Awards

The Institute of Museum and Library Services is currently accepting nomination for the 2006 National Awards for Museum and Library Service.

These awards were created to show the role that museums and libraries play in our society. Museums and libraries have a chance to showcase their commitment to serving our communities through innovative programs that reach the needs of those they serve.

The National Awards for Museum and Library Service are the highest honor given for the public service they provide. The winners will have an award ceremony in Washington, DC, as well as celebrations in their own communities.

For more information on how to nominate a museum or library, please visit www.imls.gov. All nominations must be in by January 13, 2006.

· Internet Fraud

Recently the United States Postal Inspection Service in conjunction with the FBI, Monster Worldwide, the Merchant Risk Council, and the Target Corporation launched the Internet fraud Web site, www.lookstoogoodtobetrue.com.

This website is an effort to educate consumers of the dangers of using personal information or unsafe internet practices that can lead to identity theft or fraud. The site includes information on types of fraud, as well as tips on how best to avoid having these identity problems.

Also available is a crime prevention DVD called “Web of Deceit”, which can be found at www.usps.com/postalinspectors.

· Pension Benefits

Many workers can lose track of past benefits as they move on to other employment before eventually retiring.

Pension advocacy groups have tried to start a national registry to provide a one-stop service for tracking lost pensions. Unfortunately, it is not that easy right now. One has to trace the history of the pension plan from the last day of employment to the present. This can be as easy as looking an address up in a phone book and it can be as hard as tracking through a web of complicated mergers and bankruptcies.

The Pension Benefit Guaranty Corporation (PBGC) is a government agency funded by companies to stand behind pension benefits. This is a good place to start your search. They offer an Internet Pension Search, which can be found at www.pbgc.gov/MissingParticipant/missingParticipantSearch.jsp.

If you find your name there, you could have a check within months. If not, you can contact the Employee Benefits Security Administration at the Department of Labor at www.dol.gov/ebsa, or (866)444-3272.

Legislative Week in Review

· The following bills were passed by the House of Representatives this week:

o H.R. 4096 – Stealth Tax Relief Act of 2005 (Rep. Thomas Reynolds – House Ways and Means)

o H.R. 4340 – United States-Bahrain Free Trade Agreement Implementation Act (Rep. Roy Blunt – House Ways and Means)

o H.R. 4297 – Tax Relief Extension Reconciliation Act of 2005 (Rep. William Thomas – House Ways and Means)

· To keep up to date on legislation as it moves through the legislative process please visit http://thomas.loc.gov and type in the bill number.

Anticipated Action on the House Floor Next Week

· Congress will be in session from Tuesday through Friday of next week. Some of the legislation which will be considered includes:

o H.R. 4437 – Border Security, Antiterrorism, and Illegal Immigration Control Act of 2005 (Rep. James Sensenbrenner – House Judiciary)

· Keep an eye on the Office of the Clerk’s web site for upcoming legislation: http://clerk.house.gov/legisAct/index.html. This site provides up-to-date information on House legislative schedules.

Did You Know?

· National Christmas Tree

This year, our National Christmas Tree is a 40-foot Colorado blue spruce. It is located on the Ellipse between the White House and the Washington Monument. This year the President flipped the switch on 25,000 clear lights, which are punctuated by 105 three-dimensional, snowflake ornaments that are 18”x18”. At the top of the tree is another snowflake, which stands almost four-feet tall.

Thank you for the interest in my newsletter! Remember to tell your friends about it as well--they can sign up on my web page at http://www.house.gov/shimkus.

Sincerely,

Congressman John Shimkus

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