Washington, D.C. - Today, Congressman Joe Donnelly voted in favor of H.R. 3996, The Middle Class Tax Relief Bill, which passed the House by a vote of 216 to 193. The bill would extend for one year Alternative Minimum Tax (AMT) relief for nonrefundable personal credits and increases the AMT exemption amount to $66,250 for joint filers and $44,350 for individuals.
“The legislation approved today would prevent approximately 34,000 hard-working, Second District taxpayers from facing an unexpected tax increase this year under the AMT and does so in a fiscally responsible way,” Donnelly said. “Because the AMT was never indexed for inflation—this tax would require 23 million middle class Americans to pay more than their fair share if Congress didn’t act. Providing this tax relief restores fairness and keeps money in the pockets of American families who need it most.”
The bill would provide an additional standard deduction for state and local real property taxes paid or accrued by taxpayers who claim the regular standard deduction. The maximum amount that may be claimed under this provision is $700 for joint filers and $350 for individuals. This proposal applies only for 2008.
“I am proud to support legislation that would alleviate some of the burden placed on Hoosier homeowners paying higher property taxes than ever before,” Donnelly added.
Donnelly co-sponsored similar property tax relief legislation which would allow homeowners who do not itemize to deduct their property taxes from their federal income taxes. Currently, the only citizens benefiting from the property tax deduction are those who itemize their taxes.
The bill also increases the eligibility for the refundable child tax credit. By adjusting the credit’s income threshold from $11,000 to $8,500, the bill would extend benefits to an additional 58,568 Hoosier children. In addition, the adjustment will increase the refundable portion of the $1,000 per child tax credit received by 202,882 Hoosier children.
Further, this legislation encourages economic development by extending the Research and Development credit and the expensing of costs associated with cleaning up hazardous “brownfields” sites for one year.
The fiscally responsible tax package is paid for by restoring fairness and equity to the tax code. Specifically, H.R. 3996 would close a tax loophole to ensure that income earned by wealthy Wall Street managers is treated the same as income earned by working, middle class families.
The Senate is expected to take up similar legislation in early December. If approved, the two bodies will then need to meet to negotiate a final version in a conference committee. That final version will then be sent back to each legislative body and if approved, the bill will be sent to the president for his signature.
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