September 15, 2006

REID: DO NOTHING REPUBLICANS BLOCKING MIDDLE-CLASS TAX BREAKS

Washington, DC — Senate Democratic Leader Harry Reid (D-NV) today delivered the following remarks on the Senate floor, admonishing the Republican Do Nothing Congress for blocking middle-class tax relief and incentives for businesses that conduct research in the U.S. and hire individuals on welfare. A list of tax extenders currently being blocked by Congressional Republicans follows below.

Remarks as Prepared for Delivery

Prior to the August recess Republicans attempted to win support for their flawed estate tax relief proposal by attaching the popular tax provisions referred to as the “extenders” to it.

Republicans removed the extenders from the pension reform conference agreement and added them to their “Trifecta” estate tax giveaway.

Republicans were quite clear regarding their strategy. Representative Zach Wamp claimed that Democrats had been “outfoxed” with respect to that legislation.

The Majority Leader insisted that he wouldn’t consider any of the component parts of the Trifecta bill separately, regardless of their popularity or their importance to millions of families. This strategy of holding the extenders hostage to their estate tax giveaway put these important provisions in jeopardy of not getting enacted.

As if to emphasize this point, Senator Judd Gregg said, “[i]f you don't kill the hostage, there's no threat,”

American families and businesses are paying the price for this Republican Do-Nothing Congress’ failure to extend these tax breaks. Millions of families are facing higher taxes today as a result of this failure.

Families who just recently took their sons and daughters to college are left wondering whether the tuition deduction that Republicans allowed to expire last year will be reinstated.

Families in those states without a state income tax are wondering whether they will continue to be able to deduct the sales taxes they pay on this year’s federal tax return.

Teachers who are forced to reach into their own pockets to provide supplies for their students are wondering why Republicans refuse to extend the modest tax break they get for doing so. Failure to extend these tax breaks will increase taxes for thousands of our nation’s educators.

America needs a new direction, one that puts the interests of hard-working families ahead of special interests.

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Tax Extenders Being Blocked by Congressional Republicans

R&D; Tax Credit: Tax incentive for businesses performing research and development in the United States.

Work Opportunity Tax Credit and Welfare-to-Work Tax Credit: Provides employers with tax incentives for hiring economically disadvantaged Americans, moving them off the nation’s welfare roles and into the workforce.

State and Local Sales Tax Deduction: Allows taxpayers to subtract their state and local sales taxes from their incomes when filing their Federal taxes.

Tuition Deduction: Allows parents and students to deduct qualified tuition and related expenses from their taxable income. Benefits 3.6 million taxpayers nationwide; 26,000 in Nevada.

Teacher Classroom Expenses: This provision gives teachers an above-the-line deduction of as much as $250 for personal funds spent by them to buy classroom supplies. Benefits 3.3 million teachers nationwide; 22,000 in Nevada

New Market Tax Credit: These tax credits boost investment in economically underdeveloped areas throughout the country.

Earned Income Tax Credit for Combat Pay: Allows America’s military men and women to count combat pay for purposes of qualifying for the earned income tax credit.

Qualified Zone Academy Bonds (QZABs): These bonds provide an alternative to traditional tax-exempt bonds for school renovation funding.

Mental Health Parity: Requires group health plans to provide the same coverage for mental health benefits that they provide for medical and surgical health benefits. There is a $100 excise penalty per day for violations, extended in this agreement.

Computer Donations: Extends an enhanced deduction for computer companies donating equipment to schools and public libraries

Indian Employment Tax Credit: Extends a business tax credit for employers who hire qualified employees that work and live on or near an Indian reservation.

Indian Accelerated Depreciation: Extends a special depreciation recovery period for qualified investments on Indian reservations. In general, qualified Indian reservation property is property used predominantly in the active conduct of a trade or business within an Indian reservation.

Brownfields: Permits expensing of costs associated with cleaning up hazardous (“brownfield”) sites.

DC Tax Incentives: Extends a package of tax incentives for the District of Columbia, including a $5,000 first-time home buyer tax credit and four specific tax benefits available to businesses operating in designated DC enterprise zones – a 20 percent wage credit, $35,000 of additional small business expensing, tax-exempt bonds, and zero capital gains for property held five years..

15-Year Depreciation for Leasehold Improvements: Extends the accelerated depreciation schedule for certain leasehold improvements and restaurant property from 39 to 15 years.

Puerto Rico Rum Cover-Over: Extends payments to Puerto Rico for Federal excise taxes collected on imported Puerto Rican rum.

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