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| Historic Tax Relief on its way to President |
May 26, 2001 |
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Wilson calls tax package real victory for New Mexico families
WASHINGTON, DC—Congresswoman Heather Wilson today voted for a historic measure that provides tax relief for every taxpayer to encourage economic growth and job security. The bill is on it’s way for signature by President Bush this Memorial Day Weekend.
“We’ve worked so hard over the last months to give working families some tax relief,” said Wilson today after voting for the final tax package in the wee hours of the morning. “Repealing the marriage penalty and the death tax, increasing the child tax credit, and expanding the earned income credit that many lower income New Mexicans rely on have all been priorities since I came to Congress. This is a real victory for New Mexico families.”
Immediately after her vote, Wilson boarded a plane back to Albuquerque.
“With the economy faltering, we must do everything in our power to stimulate economic growth and that means getting tax surpluses out of Washington and back in the hands of the American people,” said the federal lawmaker. “There are many New Mexicans who need a new washer and dryer, or need to get their children new school clothes, or even pay some of their college tuition or gas bills that cost so much nowadays. This tax relief bill will empower them to do so.”
A Heritage Foundation study dated May 11, 2001 found that more than 200,000 New Mexico children and their families, about 66,000 of them in Wilson’s Albuquerque-centered district, will benefit from an increase in the child tax credit. More than 140,000 married couples will be freed from the so-called marriage penalty that costs couples an average of $1,400 a year. Close to 52,000 of those couples live in New Mexico’s first congressional district.
“That is real relief for thousands of working families across New Mexico,” said Wilson of the impact this tax legislation will have for her neighbors and the people she represents.
“This plan will put money into the pockets of American consumers immediately and provide greater rewards for work and entrepreneurship in the long term. Hard-working Americans are paying more in taxes than they should, or need, to pay. By moving quickly, our hope is to have both monetary and fiscal policy restart this sluggish economy,” said Wilson.
“We have already walled off nearly $3 trillion for Social Security, Medicare, and further debt relief. We’ve paid down $363 billion of debt since 1997, reducing the debt from a high of $3.8 trillion to $3.4 trillion this year. Our fiscal house is not only in order, it is in the best shape it’s been in generations,” Wilson said.
The major components of the conference agreement follow:
Marginal Rate Reductions
* Creates new rate structure: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent.
* Gives lump-sum refund of $300 for single taxpayers, $500 for single parents, and $600 for married taxpayers this year.
* New 10 percent rate effective January 1, 2001, on first $6,000 (singles) and $12,000 (couples).
* Repeals personal exemption (PEP) and itemized deductions (Pease) phaseouts beginning in 2006.
Marriage Penalty Repeal
* 15 percent bracket widened to twice that of singles.
* Eliminates marriage penalty in the standard deduction for non-itemizers.
Death Tax Repeal
* Repeals the death tax in 2010.
* Phases in increase in the unified credit to $4 million in 2009.
Child Tax Credit Expansion
* Doubles the child credit from $500 to $1,000. ($600 in 2001-07, $700 in 2008, $800 in 2009, $1,000 in 2010).
Retirement Savings
* Increases IRA contributions from $2,000 to $5,000.
* Increases 401(k) and other tax-deferred contribution limits from $10,500 to $15,000.
* IRA catch-up contributions.
* Modifies Section 415 aggregation rules for multi-employer plans.
Education Incentives
* Increases education savings accounts (ESAs) from $500 to $2,000 and expands to K-12 public and private education.
* Above-the-line deduction for higher education expenses.
* Allows private institutions to offer pre-paid tuition plans.
* Makes permanent employer-provided educational assistance exclusion.
Adoption Tax Credit
* Increases the credit to $10,000 for special needs (currently $6,000) and non-special needs (currently $5,000).
* Increases the income phaseout range from current $75,000 to $150,000.
Alternative Minimum Tax
* Adjusts alternative minimum tax (AMT) to prevent taxpayers from losing benefits of tax reductions in the bill.
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