Neal votes for middle class tax relief
New legislation provides tax relief for 67,000 households in Central and Western Massachusetts
(WASHINGTON) Congressman Richard E. Neal, a senior member of the House Ways and Means Committee, voted for legislation today that offers more than $50 billion in middle-class tax relief and saves 67,612 households in central and western Massachusetts from paying higher taxes under the Alternative Minimum Tax (AMT). Neal has been a leader in Congress for years to repeal or reform the AMT which was originally designed to ensure very wealthy individuals were paying their fair share of income tax. The AMT tax now threatens to impact middle class families and raise taxes on 23 million Americans if Congress does not take action this year.
The Temporary Tax Relief Act of 2007, which passed the House today, protects 23 million middle-class families from being hit by the AMT and includes a series of other provisions that provide tax relief for working families. As Chairman of the Subcommittee on Select Revenue Measures, Neal also managed a large portion of the Democratic floor time during today’s debate. The following is a copy of Congressman Neal’s remarks in support of this important legislation:
“Madame Speaker, I rise in support of this bill providing tax relief and protection to millions of working families. Without an extension of these important tax provisions, there will be a real impact back home.
Without an extension, 94,577 Massachusetts Teachers who took the deduction for out-of–pocket classroom supplies, totaling $23 million in expenditures, would lose that important deduction.
Without this bill, 121,063 Massachusetts families who took the tuition deduction for higher education costs, totaling $317 million in expenditures, would lose this incentive for higher learning.
If we don’t pass this bill, 1,003 businesses in Massachusetts that took the Research and Development tax credit totaling $10 million, would lose that credit.
We must pass this bill so that 192 low-income military families in Massachusetts who claimed the Earned Income Tax Credit on income earned while in a combat zone, totally $2 million in earnings, will keep that credit.
Further, Massachusetts school districts, which received $6.5 million in bond authority for school construction, stand to lose that assistance without this bill.
And let me conclude with the impact on middle income families from the AMT. If the AMT patch is not enacted this year, Massachusetts will increase from 125,684 taxpayers subject to AMT, to 770,336 for the 2007 tax year. In my district alone, this means an increase from 7,361 to 67,612. And half of those 60,000 paying AMT this year will earn between $100,000 and $200,000. Another third earns between $75,000 and $100,000.
This is a middle-class tax relief bill. I urge its adoption.
The bill also provides relief to workers unfairly caught by the Alternative Minimum Tax on Incentive Stock Options (ISO’s). In prior Congresses, I have filed legislation to eliminate or lessen the burden on the AMT on these workers who can be hit with taxes on phantom gain that can never be repaid. Last year, Congress enacted partial relief in the form of a credit for past AMT taxes paid. This bill extends that relief to all taxpayers hit by the AMT because of ISO’s.