Wednesday, May 30, 2001
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Wednesday, May 30, 2001 |
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Collins heralds 'victory' for tax relief U.S. Rep. Mac Collins said passage by Congress of tax relief is a victory for the American people because it will return overpayments to taxpayers and encourage investment and economic activity that will benefit everyone. Collins, who represents Fayette, spoke after the House of Representatives passed the conference report on the tax relief act early Saturday morning. "This legislation moves America in the right direction," Collins said. The Georgia congressman, a member of the House Ways and Means Committee which crafted the original tax relief package, said the bill is good legislation even though it could use some improvement. "I would have designed some of the provisions differently," he said. "However, the provisions in the bill will assist the taxpayers of this nation and passage of this tax relief will be helpful to the economy. Overall it is a fine piece of legislation. "My colleagues in the House and Senate have done a good job on this legislation, and it is a good day for the American taxpayer and hard-working American families," Collins said. He said the bill cuts marginal rates, encourages savings by boosting allowable contributions to individual retirement accounts, protects family businesses by phasing out the estate tax, and lowers the tax penalty on married couples. The bill also encourages savings for education by providing tax incentives for education savings accounts. The major components of the conference agreement follow: Marginal rate reductions (similar to HR 3) Lowers the top tax rate from 39.6 percent to 35 percent, and lowers other tax rates to create a new rate structure: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent. Creates new 10 percent rate effective Jan. 1, 2001, on first $6,000 (singles), on first $10,000 (single parents), and first $12,000 (couples). For 2001, the benefit of the new 10 percent bracket is provided this year through a lump-sum refund of $300 for single taxpayers, $500 for single parents, and $600 for married taxpayers. Repeals personal exemption and itemized deductions phase-outs beginning in 2006. Marriage penalty repeal (similar to HR 6) 15 percent bracket adjusted to twice that of singles. Standard deduction for married couples will be twice that of singles if phased-in over five years beginning in 2005. Child Tax Credit expansion (similar to HR 6) Doubles the child credit from $500 to $1,000. Increases child credit to $600 (2001-2004), $700 (2005-2008), $800 (2009), $1,000 (2010), and makes refundable in part. Estate tax repeal (similar to HR 8) Repeals the estate tax in 2010. Phases in increase in the unified credit $1 million (2002-2003), $1.5 million (2004-2005), $2 million (2006-2008), $3.5 million (2009). Expands the availability of the current law estate tax exclusion for conservation easements. Pension and retirement savings (similar to HR 10) Increases IRA contributions from $2,000 to $5,000. Increases 401(k) and other tax-deferred contribution limits from $10,500 to $15,000. Deletes tax-free IRA withdrawals for charitable purposes. "Catch-up" contributions for people age 50 and above. Provides over 50 other improvements. Education incentives Increases education savings accounts from $500 to $2,000 and expands to K-12 public and private education. Above-the-line deduction for qualified higher education expenses. Allows tax-free distributions from qualified tuition plans and permits private institutions to offer such plans. Makes permanent employer-provided educational assistance exclusion and extends the benefit of the exclusion to graduate level courses. Adoption tax credit (similar to HR 622) Increases the credit to $10,000 for special needs (currently $6,000) and non-special needs children (currently $5,000). Increases the income phase-out range from current $75,000 to $150,000. Alternative Minimum Tax relief Temporary increase in exemption amount by $2,000 for single individuals and $4,000 for couples.
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