Press Release of Senator Crapo
Crapo Vows To Fight For Capital Gains/Dividend Relief Before Full Senate
Supports Finance plan to extend tax relief provisions
Contact: Susan Wheeler
Washington, DC – Idaho Senator Mike Crapo supports the tax reconciliation measure passed by the Senate Finance Committee on Tuesday evening, but says that he will fight to extend existing federal tax cuts on capital gains, dividend income, and other investments. Crapo, a member of the Senate Finance Committee, voted in favor of the tax and investment measure that passed on a 14-6 vote in committee. Crapo plans to continue to press for an extension for the lower rates on capital gains and dividend investments and has gained the support of Senate Majority Leader Bill Frist in the effort.
“The bill passed by the Finance Committee does not go far enough to stop tax increases from returning to haunt Americans,” Crapo said. “I am heartened that Majority Leader Frist agrees we must extend these tax rates and I join him in the belief that extensions on capital gains and dividend tax relief can be revived in conference committee negotiations with the House. It is too easy as well as inaccurate to claim that these tax cuts will further increase the deficit. The numbers show that although these specific taxes were cut in 2003, federal revenues increased by $270 billion in 2005.” Crapo says investment tax rates of 15 percent on capital gains and dividends must be extended for another two years in the reconciliation bill; they are presently slated to end in 2008.
Crapo continued, “There is no question that the economy is growing, both in Idaho and the nation. That has resulted in new jobs and revenue creation. Maintaining lower taxes and cutting spending will spur economic growth and lower the deficit. Now is the time to continue job creation and business growth by signaling to investors that conditions will stay positive. I am sure hardworking Idaho families saving for the future and Idaho seniors who rely on investment income to maintain their standard of living in retirement appreciate this commitment as well. Hard-working Idahoans and others should not be surprised by tax increases if the Congress fails to address extending these tax rates. Moreover, people don’t only look to the next year when making investments for the future. We must act now to assure those who make investments today that they will not face a stealth tax increase when they cash out those investments in the future.”
Crapo voted to approve the overall Tax Relief Act of 2005, saying it prevents millions of middle class Americans, including more than 25,000 in Idaho from being unfairly hit by the Alternative Minimum Tax. The bill also prevents the elimination of the tuition deduction for students, the successful small business expensing provision, the Research and Development tax credit, as well as the tax deduction for teachers who purchase classroom materials out of their own pockets. The measure also contains a number of important tax provisions aimed at helping to rebuild the economy in the Gulf Coast states damaged by this year’s hurricanes. Many of these provisions are targeted at replacing damaged housing, infrastructure and businesses.
Since the tax relief measure was enacted in 2003, the country has had eight straight quarters of economic growth greater than three percent. In addition, the tax relief provisions allowed seven million seniors to save an average of $1,230 on their 2004 taxes.
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