WASHINGTON – First District Congressman Paul Ryan today praised House passage of a $1.35 trillion tax relief package that includes marginal rate reductions, marriage penalty relief, child tax credit expansion, repeal of the death tax, and increased contribution limits for Individual Retirement Accounts and 401(k) plans. Ryan voted for the legislation – H.R. 1836 – which passed in the U.S. House of Representatives by a bipartisan margin of 240-154. The measure is the product of negotiations between the House and Senate on a tax relief package that contains the major elements of the President's tax relief plan.

"Americans have overpaid their taxes for years and this legislation delivers a well-deserved refund," Ryan said. "The package provides tax relief for every taxpayer – so that, for once, Washington is returning money rather than spending it."

"Besides reducing tax rates across-the-board, the legislation offers added relief for couples hit by the marriage tax penalty, parents, and small-businesses hurt by the death tax," Ryan said. "The bill also benefits everyone planning for retirement and encourages savings by letting people put more money away each year in tax-favored accounts. In addition, it makes education more affordable by boosting education savings accounts."

"The President promised education reform and Congress delivered. The President vowed to lower taxes for all taxpayers, and today we voted to do just that. We have been moving forward and making good on the President's initiatives, and I hope we can continue to work together in this bipartisan fashion to make further progress in other areas in the weeks and months ahead," Ryan said.

The major components of the conference agreement follow:

Marginal Rate Reductions

Lowers the top tax rate from 39.6 percent to 35 percent, and lowers other tax rates to create a new rate structure:  10 percent, 15 percent, 25 percent, 28 percent 33 percent, and 35 percent.
Creates new 10 percent rate effective January 1, 2001, on first $6,000 (singles), on first $10,000 (single parents), and first $12,000 (couples).
For 2001, the benefit of the new 10 percent bracket is provided this year through a lump-sum refund of $300 for single taxpayers, $500 for single parents, and $600 for married taxpayers.
Repeals personal exemption (PEP) and itemized deductions (Pease) phase-outs beginning in 2006.

15 percent bracket adjusted to twice that of singles.
Standard deduction for married couples will be twice that of singles is phased-in over five years beginning in 2005.

Doubles the child credit from $500 to $1,000.
Increases child credit to $600 (2001-2004), $700 (2005-2008), $800 (2009), $1,000 (2010), and makes refundable in part.

Repeals the death tax in 2010.
Phases in increase in the unified credit -- $1 million (2002-2003), $1.5 million (2004-2005), $2 million (2006-2008), $3.5 million (2009).

Increases IRA contributions from $2,000 to $5,000.
Increases 401(k) and other tax-deferred contribution limits from $10,500 to $15,000.
“Catch-up” contributions for people age 50 and above.
Provides over 50 other improvements.
Fixes Section 415 in the tax code so building tradesmen can retire with full benefits.

Increases education savings accounts (ESAs) from $500 to $2,000 and expands to K-12 public and private education.
Above-the-line deduction for qualified higher education expenses.
Allows tax-free distributions from Qualified Tuition Plans and permits private institutions to offer such plans.
Makes permanent employer-provided educational assistance exclusion and extends the benefit of the exclusion to graduate level courses.

Increases the credit to $10,000 for special needs (currently $6,000) and non-special needs children (currently $5,000).
Increases the income phase-out range from current $75,000 to $150,000.

Temporary increase in exemption amount by $2,000 for single individuals and $4,000 for couples.

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