WASHINGTON, D.C. - Third District Congressman Jon Porter voted today in support of H.R. 4297, the “Tax Relief Extension Reconciliation Act of 2005.”  The bill, which passed the House by a 234—197 margin, will extend common-sense tax policies that have stimulated the economy and helped lower the deficit.

“Today’s economy is strong and getting stronger by the day, thanks in large part to the initial round of pro-growth tax cuts passed in May of 2003,” said Porter.  “Just last month, 215,000 jobs were created for hard-working Americans, raising the total to 4.4 million new jobs in the past two-and-a-half years.  Simply put, the tax cuts are working, and a vote to extend them is a vote for more jobs, small business growth and a lower deficit.”

Highlights of H.R. 4297:

• Reduced Rates on Capital Gains and Dividends – Under current law, capital gains and dividend income are taxed at a 15-percent rate.  The rate will be reduced to zero in 2008 for taxpayers in the 10- and 15-percent tax brackets.  These rates will increase starting in 2009.  H.R. 4297 extends the reduced tax rates through 2010.
• Enhanced Section 179 Expensing for Small Business – Under current law, small businesses may expense (i.e., deduct in the first year) up to $100,000 of investments in depreciable assets.  The deduction phases out dollar-for-dollar to the extent the business’s annual investments exceed $400,000.  Without action, the expensing limit will decline to $25,000 and the phase-out threshold will decline to $200,000 after 2007.  H.R. 4297 extends the $100,000 expensing limit and $400,000 phase-out threshold through 2009.
• State and Local Sales Tax Deduction – Individuals may claim a Federal income tax deduction for income taxes paid to state and local governments.  Some states, including Nevada, do not levy income taxes on their residents; instead, they finance their operations primarily through the collection of sales taxes.  H.R. 4297 creates parity among states by allowing all taxpayers the option to deduct their state and local sales taxes in lieu of their state and local income taxes.  H.R. 4297 prevents this provision from expiring after 2005.

“For Nevadans, the importance of extending the state and local sales tax deduction goes without saying.  It’s only fair that our residents continue to enjoy the same tax benefits as those who pay state income taxes,” Porter stated.

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