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This page contains a single entry by Westley Annis published on March 19, 2008 10:01 PM.


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Passage of 2009 Budget Resolution Includes Key Tax Relief Measures for La.

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Passage of 2009 Budget Resolution Includes Key Tax Relief Measures for La.

Democratic Senate leaders will work on details of Road Home tax fix during Easter recess.

WASHINGTON - In a so-called Vote-O-Rama that lasted approximately 15 hours and included 44 record votes, the Senate passed a $3 trillion 2009 Budget Resolution yesterday, 51-44. In addition to a key provision that will provide tax relief to the recipients of Louisiana Road Home rebuilding grants, the nonbinding budget plan endorsed tax cuts for working families, credits for families with children, relief from the joint-filing penalty paid by America's couples, and an extension of the adoption tax credit.

The Road Home tax fix measure was included in an amendment offered by Senate Finance Chairman Max Baucus, D-Mont., which was approved 99-1. It is a critical first step in correcting the unfair situation facing Louisiana homeowners who claimed a casualty loss deduction following the 2005 hurricanes and subsequently received a Road Home rebuilding grant. According to rules outlined by the Internal Revenue Service (IRS), homeowners are now being required to pay back the causality loss deduction. Chairman Baucus and other Democratic leaders have committed to Sen. Landrieu to work on final details of the fix over the upcoming recess.

"I am pleased that the U.S. Senate has now committed its support to crafting a fair solution for Louisiana taxpayers who are facing unjustifiably large tax bills," Sen. Landrieu said. "As the people of Louisiana continue trying to rebuild what was lost to Hurricanes Katrina and Rita, they should be able to maximize the resources Congress provided following the storms. They should not be forced to untangle complex rules outlined by the IRS that diminish the very resources that were intended to ease the innumerable burdens already facing the victims of the Gulf Coast."

As many as 145,000 Louisiana homeowners stand to benefit from a Road Home tax fix.

The other provisions of the Baucus amendment will also greatly benefit Louisiana families. A $1,000 tax credit provided for each child in a family will affect 362,544 Louisiana families, while 500,000 Louisiana families will be relieved from the joint-filing penalty that affects married couples. Furthermore, the amendment permanently extended the adoption tax credit, which was utilized by 752 Louisiana families in 2005.

The Baucus amendment will allow millions more Americans to deduct property taxes on their federal returns, which would affect 885,000 families in Louisiana.

The overall budget also spares approximately 110,000 Louisiana households from the alternative minimum tax.

This budget eliminates an upcoming estate tax hike and freezes the tax at a $3.5 million exemption for individuals (7 million for couples) and a 45 percent tax rate for estates above these levels. Sen. Landrieu offered an amendment that would have provided substantial and fully paid-for estate-tax relief for family farmers and business owners. The amendment would have raised the individual estate tax exemption to $5 million, or $10 million for couples, and would have dropped the tax rate to 35 percent. However, the measure was defeated (23-77) as was an amendment offered by Sen. John Kyl, R-Ariz., that would have provided equal tax relief but was not funded in any way.



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