Oct 31 2008 -
In October, Congress passed legislation that contained important tax relief for Mississippi and our country. The bill included extensions of tax relief provisions that have recently expired or are about to expire. This represented a bipartisan victory for taxpayers, especially at a time when positive economic news is needed.
Considering our economic challenges, some have suggested that now is the time to raise taxes. Doing so, however, would only deepen and prolong our economic downturn. I believe in lower taxes and have consistently fought to provide all Mississippians with tax relief. Congress needs to build on this recent action and pass additional tax relief to help spur economic activity.
TAX RELIEF FOR MISSISSIPPIANS
The tax relief passed last month contained a number of provisions beneficial to Mississippi, including a one-year extension of Alternative Minimum Tax (AMT) relief. While perhaps not a household name, the AMT is a serious problem facing more and more families each year. In 1969, the federal government introduced the AMT as a way to ensure 155 of the wealthiest Americans paid their taxes. The tax was never indexed for inflation, however, and today the AMT targets 23 million Americans, threatening to raise their taxes by an average of $2,300 per year. The legislation recently passed provided a one-year shield for those 23 million taxpayers, but Congress should take additional action to permanently repeal this unintended tax.
The bill also contained provisions important to Mississippi’s schools, including a four-year extension of the Secure Rural Schools Act. This legislation provides federal funding for several Mississippi school districts in counties where federal land ownership reduces local property tax collection. Additionally, the educator’s deduction was extended, allowing teachers to deduct up to $250 of their out-of-pocket classroom expenses from their federal tax bill.
Finally, to further assist rebuilding efforts along Mississippi’s Gulf Coast, the bill extended the increased rehabilitation tax credit originally included in the GO Zone legislation. This credit helps encourage businesses and developers to rebuild and restore historic buildings that were damaged by Katrina.
SET TO EXPIRE
While this recently-passed tax relief was a positive development, more needs to be done to ensure taxes aren’t raised on families and small businesses. Sweeping tax cuts implemented in 2001 and 2003 should be made permanent. These measures cut taxes for everyone by lowering all tax brackets, including the creation of the new 10 percent bracket for low-income taxpayers. This tax relief also included a reduction in the marriage penalty, an increase of the child tax credit, and a phasing-out of the “death tax” that hurts small businesses and family farms. This tax relief is set to expire in 2011, and unless Congress acts to extend these measures or make them permanent, families will be hit with the largest tax increase in our nation’s history.
CONTINUED TAX RELIEF
I was glad Congress took the action it recently did to extend key tax relief provisions. Since 2001, I believe we have put into place many pro-growth, pro-taxpayer policies that are beneficial to Mississippi and our entire country. It is important that Congress build on recent legislative success and work to pass additional tax relief and extend current tax relief provisions that are set to expire. Doing so will put more money in your pocket and place us on the road to economic recovery.