[StBernard] Landrieu Secures Road Home Tax Fix in Key Budget Amendment

[Westley Annis]

Landrieu Secures Road Home Tax Fix in Key Budget Amendment Works closely
with Finance Chairman Max Baucus to include measure in critical tax relief
amendment up for vote Thursday.

 

WASHINGTON - United States Senator Mary L. Landrieu, D-La., and Senate
Finance Committee Chairman Max Baucus, D-Mont., today announced that tax
relief for Louisiana Road Home rebuilding grant recipients is part of a key
budget amendment to be voted upon Thursday.  

The measure rights an unfair circumstance where homeowners who claimed a
casualty loss deduction following the 2005 hurricanes are now required to
pay the money back to the Internal Revenue Service (IRS) if they also
received a Road Home rebuilding grant. Congress had passed legislation
immediately following the hurricanes easing restrictions on such deductions.
However, the grants have elevated many homeowners into higher tax brackets,
resulting in tax burdens far greater than any savings received after the
storms.

"Congress smartly changed the law to put money in homeowners' pockets when
they needed it most," said Sen. Landrieu, who has also introduced standalone
legislation addressing the issue and repeatedly urged the IRS to take
administrative action. "But to now tax rebuilding and make homeowners pay a
premium for rightly taking the government up on its offer - that goes
entirely against the principles we were fighting for.

"This amendment reflects the Senate's intent to set this right. I thank
Chairman Baucus for his leadership and working with me to ensure that
hurricane-affected Louisianians will be able to rebuild without the
impediment of unfair taxes."

"Days after Hurricane Katrina and Rita struck the Gulf Coast in 2005, we got
the Senate moving on a number of proposals to help victims deal with the
aftermath," Sen. Baucus said.  "Today, the survivors of Katrina and Rita
still need our help. This proposal will ensure that financial assistance for
Gulf Coast residents doesn't come with a tax penalty that just might sink
them again."

The Baucus amendment, introduced today and expected to be voted on by the
full Senate this Thursday, permanently extends important tax cuts for
working families, including a tax credit provided for each child in a
family, relief from the joint-filing penalty paid by America's married
couples and the increased adoption tax credit.  

Baucus's amendment also provides several billion dollars in fully paid-for
tax relief to members of America's military, including a provision allowing
combat pay to count toward eligibility for the earned income tax credit - a
refundable federal income tax credit that puts cash in the hands of
low-income working individuals and families. 

The amendment provides a tax cut Sen. Landrieu has long supported to small
business that continue paying some salary to members of the National Guard
and Reserve who are called to duty. It also would allow active duty troops
to withdraw from their retirement plans with two years to replace it without
penalty.

Additionally, Baucus's amendment allows millions more Americans to deduct
property taxes on their Federal returns and provides a permanent extension
of reductions to the estate tax.

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