Washington, D.C. – Today, Congressman Walter B. Jones (R-NC) appeared before a joint hearing of two House Ways and Means Subcommittees to testify in support of H.R. 418, a bill he introduced to permit military death gratuities to be contributed to certain tax-favored accounts. The House Subcommittee on Income Security and Family Support and the Subcommittee on Select Revenue Measures received testimony from Jones and other members who have introduced bills that will be inserted into pending tax legislation called the Heroes Earnings Assistance and Relief Tax Act of 2007, which is designed to help members of the U.S. Armed Forces and their families.

Congressman Jones’ testimony follows below:

Mr. Chairmen, Ranking Members, our men and women in uniform serve this nation with great honor and distinction. Many give their lives for this country. It is for this reason that I introduced this legislation over two years ago. H.R. 418 permits military families who receive the death gratuity to invest the full amount into certain tax-favored accounts.

As you may know, a death gratuity is a $100,000 payment paid to survivors of service members whose death resulted from combat-related circumstances. Current tax law limits the amount that recipients of the death gratuity can place in tax-preferred accounts such as a Roth IRA or Coverdell Education Savings Account. This legislation would change that to allow recipients to contribute up to the full amount of the gratuity payment to any one of those accounts.

As the families of our fallen heroes try to put their lives back together, they need all the help they can get. They should not have to worry about saving the death gratuity to pay for retirement, college, or other expenses – and then have the government come in and tax the interest on that savings. This bill would help ensure that does not happen.

The need for this legislation was brought to my attention by Captain Michael Ceres, a constituent stationed at Marine Corps Air Station New River. Captain Ceres, who had just returned from serving in Iraq, contacted my office and suggested that Congress institute this change to ease the burden on grieving military families.

The Joint Committee on Taxation has scored this legislation at no cost, meaning that the actual cost of the proposal is less than $500,000 over 9 years. We owe it to our fallen military heroes to expand the options of families who receive the death gratuity, families who have paid the ultimate cost with the loss of their loved one.

H.R. 418 has also received the endorsement of The Military Coalition, a group of prominent national military and veterans’ organizations that represents more than 5.5 million members plus their families.

Today, I call upon my colleagues to support H.R. 418 to expand the options of military families whose loved ones have given their lives in the name of freedom and in defense of our nation.

For additional information or to request an interview with Congressman Walter Jones, please contact Kathleen Joyce at (202) 225-3415.