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House Votes to Provide More Consistent Tax Relief to Parents

WASHINGTON – Wisconsin’s First District Congressman Paul Ryan voted today in favor of a proposal that would deliver more continuous, dependable tax relief to parents by ensuring that the child credit stays at $1,000 per eligible child through 2010, instead of dropping to a lower level in 2005.  This provision was part of a package the House of Representatives approved today that supplements the just-enacted Jobs and Economic Growth Tax Relief Act with additional tax relief and includes spending to accelerate benefits for low-income parents.     

“If this plan becomes law, parents will be able to count on a child tax credit that holds steady through the end of this decade.  It gives them more tax relief they can count on when they plan the family budget,” Ryan said.  “When Congress has the chance to lower the heavy burden on taxpayers and make the tax code simpler at the same time, we should do it.  Repealing the child credit sunset in 2005 does this.” 

The measure the House approved today includes the following provisions:

·        Maintains the child credit at $1,000 per eligible child through 2010.  The $1,000 child credit is scheduled to sunset in 2005 and gradually increase back to $1,000 by 2010.  Today’s House legislation ensures that the child credit stays at the $1,000 level through 2010. 

·        Eliminates the marriage penalty in the child credit, by increasing the income level at which families begin to lose the credit from $110,000 to $150,000 (twice the level of the single filer phaseout.)

·        Accelerates the increase in the refundable child credit.  Under present law, the child credit is refundable by an amount equal to 10% of earned income in excess of $10,500.  The 10% rate is scheduled to increase to 15% in 2005.  Today’s legislation accelerates this increase so that the 15% rate takes effect in 2003 instead of 2005.

·        Provides tax relief and enhances tax fairness for members of the armed forces.  The measure the House approved today includes the military tax relief provisions that have passed the House and are awaiting action in the Senate.  These include provisions that

• alter how capital gains taxes are computed for homes of Armed Services and Foreign Service members and their spouses, under certain conditions;
• provide complete tax-free treatment of death gratuity payments;
• expand combat-zone tax-filing rules to cover contingency operations.

·        Suspends the tax-exempt status of an organization if it is designated as a terrorist organization or is listed in or designated by an Executive Order as supporting terrorism. 

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