Snowe Introduces Legislation to Suspend Taxation of Unemployment Benefits
December 8, 2008
Washington, D.C. - In light of the devastating economy and a high unemployment rate, U.S. Senator Olympia J. Snowe (R-Maine) today introduced the Unemployment Benefit Tax Suspension Act of 2008, legislation designed to temporarily suspend the collection of federal taxes of unemployment compensation benefits for 2008 and 2009. Recent Labor Department figures show the unemployment rate rose to 6.7 percent in November, totaling 10.3 million Americans without jobs. Under current law, their benefits will be subject to federal income tax.
"Just last Friday, the Labor Department released yet another set of staggering unemployment numbers that demonstrate how perilous the job market is," said Senator Snowe. "We must do everything within our power to make unemployment benefits stretch farther for those seeking gainful employment, and this bill will put more money in the hands of low- and middle-income families immediately. It is a temporary step designed to cushion the blow of recession for millions of Americans."
Most of the benefits of suspending this tax are likely to go to lower- and middle-income families, who are struggling more than ever just to makes ends meet. The Congressional Budget Office estimated that in 2005, of the 8.1 million recipients of unemployment compensation benefits, 7.5 million had incomes of under $100,000.
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