OFFICIALS LEGISLATION INTEREST GROUPS PUBLIC STATEMENTS COMMITTEES VETOES

Tax Revision Act of 2005

Date: Dec. 7, 2005
Location: Washington, DC
Issues: Military Personnel Taxes


TAX REVISION ACT OF 2005 -- (House of Representatives - December 07, 2005)

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Mr. LARSON of Connecticut. Mr. Speaker, I rise today in support of H.R. 4388, the Tax Revision Act. Among other things, H.R. 4388 includes an extension of a critical tax provision that our troops and their families rely on to make ends meet when deployed in Iraq and Afghanistan.

The Working Families Tax Relief Act (PL-108-311), which we passed last year, included language which ensured that military families are not unfairly prevented from receiving the Earned Income Tax Credit (EITC) because the combat pay they rely on to make ends meet is tax free.

Ordinarily only those with taxable earned income are eligible for the EITC. However the only source of income for many military families is the tax free combat pay of a spouse deployed in Iraq or Afghanistan. As a result, before we passed last year's legislation, many low-income military families were unable to claim the EITC based on the tax free status of their family members' combat pay.

The last thing our troops in Iraq and Afghanistan need to worry about is their families' taxes. The extension of the EITC combat pay provision will ensure that the families of our brave men and women in uniform are not unfairly and inadvertently punished when their loved ones are deployed abroad.

The tax treatment of combat pay for EITC purposes is not controversial. However, it was not included in the larger reconciliation bill on apparently technical grounds that the refund portion of the EITC is a budget outlay and therefore cannot be included in the bill. The substitute that Democrats offered in Committee contained a provision, rejected by majority, that was designed to continue full EITC benefits to our military families and which did not run afoul of the budget rules.

I worry that this bill is for show and merely meant to help make some on the other side of the aisle feel better about the tax cut bill they will support tomorrow which helps the wealthy and ignores working and military families. I hope that my concerns are unfounded and that this important legislation is made into law.

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