back May 10, 2006 Ryan’s Veterans Legislation Passes House as Part of Bill to Prevent Tax Increases Measure Will Enable Wisconsin to Continue Veterans’ Mortgage Loan Program; Overall Legislation Will Prevent Tax Hikes WASHINGTON – Legislation authored by First District Congressman Paul Ryan that would allow Wisconsin to continue its special mortgage loan program for veterans passed the House of Representatives today by a vote of 244-185 as part of broader legislation to prevent tax hikes.  Ryan voted for the legislation – the conference report to H.R. 4297 - that prevents harmful tax increases on families and small businesses through short-term Alternative Minimum Tax (AMT) relief and by extending several current-law tax relief provisions that are scheduled to expire in the near future. The overall measure is the product of House-Senate negotiations to resolve differences between earlier versions of the legislation and awaits approval in the Senate before it can become law.  “Wisconsin veterans of Iraq, Afghanistan, and other recent military action deserve the same access to homeownership as earlier generations of veterans. Our legislation makes it possible to extend Wisconsin’s special loan program and open it up to assist recent veterans,” said Ryan. Under current law, Wisconsin and several other states are authorized to issue tax-exempt bonds, the proceeds of which are used to finance mortgage loans to veterans. However, these mortgage loans can be made only to veterans who served on active duty before 1977 and who applied for the loan within 30 years after they left active military service. Therefore, veterans of more recent or ongoing military operations such as Operation Iraqi Freedom, Operation Enduring Freedom, Kosovo, Somalia, and the 1991 Persian Gulf War are not eligible, under present law, for such mortgage loans.  Ryan’s provision, included in the conference report to H.R. 4297, repeals the requirement that veterans receiving loans financed by these veterans’ bonds must have served before 1977, enabling Wisconsin’s veterans’ home loan program to stay active and assist Wisconsin veterans of Iraq, Afghanistan and other more recent conflicts.  Additionally, the legislation provides new state limits for these bonds. Under this measure, the new bonding authority for Wisconsin to provide these loans would be phased in over five years and would sunset in 2010. “I also support this bill because it extends expiring tax relief that has fueled job growth and prevents tax hikes that would hurt Wisconsin families and businesses. The last thing Wisconsinites need are tax increases, but that’s what will happen if we let the tax relief lapse,” Ryan said. “Since Congress lowered taxes on investment in 2003, America’s economy has grown and created more than 5 million jobs, and tax receipts going into the U.S. Treasury have risen too. Extending this tax relief will help create more jobs, strengthen our economy and help us reduce the deficit.”  Overall, the conference report to H.R. 4297, the Tax Increase Prevention and Reconciliation Act: Prevents 15 million taxpayers from getting hit by the AMT in 2006 and helps many more by increasing the exemption amounts and allowing nonrefundable personal credits to offset the AMT. The legislation extends the AMT exemption levels through the end of 2006 at a higher level than in 2005. The new exemption levels for 2006 are $62,550 for joint filers and $42,500 for single filers.  Extends for two years (through the end of tax-year 2009) the ability of small businesses to expense (deduct in the first year) up to $100,000 of investments in depreciable assets. Without action, the expensing limit would have declined to $25,000 after 2007.  Maintains the current 15-percent dividends and capital gains tax rates through 2010, rather than letting these expire (and raise taxes) at the end of 2008.  The 2003 tax relief, which reduced tax rates on capital gains and dividends, has fueled significant economic expansion and helped generate 5.2 million new U.S. jobs. At the same time, because of this growth, the federal government has seen an increase in tax revenues flowing into the Treasury and a reduction in the deficit. After witnessing declines in revenues from 2000 through 2003, revenues surged in 2004 and 2005, and they are surging again in 2006.  Final 2005 tax payments from individuals were $20-25 billion higher than the Congressional Budget Office (CBO) expected, and so far this year corporate receipts are about $40 billion higher than last year, according to a report released last week by the CBO. As a result, the CBO anticipates a sharp reduction in the Fiscal Year 2006 deficit from their previous estimates and cites robust revenue growth as a key factor in this improvement. Contrasting the following economic figures from before and after the 2003 tax relief offers an idea of the positive impact the tax cuts have had: Since the enactment of the 2003 tax cuts, the unemployment rate has fallen from 6.3% (June 2003) to 4.7% (April 2006).  In the two and a half years preceding the tax cuts, our economy lost 2.6 million jobs. Since the tax cuts, we have gained over 5.2 million jobs.  Prior to the 2003 tax cuts, business investment had decreased for 8 straight quarters. Following the tax cuts, business investment has increased for 11 straight quarters.   Print Contact: Kate Matus (202) 226-7326