President Obama today signed into law an extension of tax relief. The bipartisan package extends a series of provisions Sen. Chuck Grassley of Iowa sponsored and shepherded into law as chairman of the Finance Committee in 2001 and 2003 and as a leading supporter of biofuels such as ethanol and biodiesel. The Finance Committee has exclusive Senate jurisdiction over taxes. Grassley made the following comment on the President's signing of the bill into law.
"This will be good for taxpayers and the economy. Raising taxes would have been the worst thing we could do with unemployment at nearly 10 percent. Continued tax relief gives people the ability to keep more of their money to use as they see fit, whether it's buying groceries or investing in their small business. Sending more money to Washington would just result in more spending, which is the last thing the country needs. The restoration of the biodiesel tax credit and continuation of the ethanol tax credit, along with 49 other tax incentives for different sectors of the economy, are part and parcel of job retention and creation. Biodiesel has lost nearly 23,000 jobs because the credit lapsed. Ethanol has 112,000 jobs at stake. These industries offer the most effective alternative to expensive foreign oil from unfriendly countries."
The Grassley-sponsored tax-relief bill enacted in 2001 was the biggest in a generation. It lowered marginal rates and created the 10-percent bracket. It made tax-free savings plans for college a permanent part of the tax code, created the deduction for tuition, and secured the tax deductibility of interest on student loans. If this tax relief wasn't extended in 2010, on average, Americans' tax bills would have gone up by 10 percent. Without action:
--the tax deduction for college tuition would have gone away
--the expanded part of the tax deduction for interest on student loans would have gone away
--the 10-percent tax bracket for low-income workers would have ended
--six million very low-income taxpayers removed from the tax rolls altogether in 2001 would have been taxed again
--the tax-free treatment of employer-provided educational assistance would have gone away. Across America, one million workers who go to school at night or part-time benefit from this tax relief.
--the tax benefit for certain bonds to improve and build schools would have gone away
--the tax-preferred expanded part of education savings accounts would have gone away
--there would have been a higher tax penalty for marriage
--the child tax credit would have been cut in half (from $1,000 to $500)
--the refundable child tax credit for many people who don't pay taxes would have gone away
--savers, investors and seniors would have paid higher taxes on dividends and capital gains
--the estate tax would have come back in full (to a 55 percent tax rate and $1 million unified credit exemption amount).
For more information on the biodiesel and ethanol tax credits enacted today, click here.
