Larson: "Time for Progress"
Washington – Today, Rep. John B. Larson (CT-01) joined President Obama in supporting the passage of the Protecting Americans from Tax Hikes (PATH) Act, which included billions in tax breaks for working families via the Earned Income Tax Credit and Child Tax Credit, as well as the Brady/Larson R&D Tax Credit and the Johnson/Larson Wrongful Convictions Tax Relief legislation.
“Though Congress has long been deeply divided, today we demonstrated we can find common ground for the good of the American people,” said Larson. “It is past time for us to make progress and move forward. Though this bill was far from perfect, it contains vital tax breaks for children and working families. Without the Earned Income Tax Credit and Child Tax Creditprovisions, over 50 million Americans would have been at risk of losing all or part of the credits they rely on by 2018. We could not let that happen.
“This bill also provides much needed stability in our tax code for small businesses and manufacturers. This is a tremendous victory for the First District to help grow jobs and keep us competitive globally. I am particularly thrilled to see the permanent extension of the R&D tax credit, a bill I have supported since I came to Congress in 1999, and sponsored with my colleague, Chairman Kevin Brady (R-TX). The R&D tax credit is a driver of jobs and innovation both in Connecticut and across our nation. Making it permanent will provide security for companies to grow more jobs and make more investments here in America. I was also pleased that other provisions that will help spur economic development like Section 179 expensing were made permanent as well.”
Another bill sponsored by Larson along with Rep. Sam Johnson (R-TX) – the Wrongful Convictions Tax Relief Act – was included as a part of the PATH Act. Initially introduced in 2007 following the exoneration of James Tillman in Connecticut, the legislation would ensure that compensation awards received by those who were wrongfully accused are not subjected to federal taxes on their awards.
“It is truly an honor to work alongside an American hero like Sam Johnson on the Ways and Means Committee. His commitment to this issue is just another example of his incredible service to our nation. I was proud to co-author the Wrongful Convictions Tax Relief bill with him, which will right a tremendous wrong in our tax code. Individuals who have been wrongfully accused have already suffered enough. The notion that they would be taxed on the awards they receive as a result of their wrongful imprisonment is unconscionable. I thank the negotiators for including this common-sense bill in this package.”
The PATH Act also includes permanent extensions of enhancements to a key higher education credit (the American Opportunity Tax Credit), of a deduction for teachers who purchase supplies for their classrooms, critical charitable provisions such as a credit for the donation of food inventory, a provision that allows for tax-free distributions from IRAs for charitable purposes. Other extensions include:
- 5 Year Extension of the New Markets Tax Credit (Larson is a cosponsor of H.R. 855 – New Markets Tax Credit Extension Act of 2015).
- Extension of mortgage debt forgiveness tax relief through 2016 (Larson is an original cosponsor of H.R. 1002 – The Mortgage Forgiveness Tax Relief Act of 2015)
- Permanent Extension of the 9-percent minimum credit rate for the low-income housing tax credit (LIHTC) (Larson is an original cosponsor of H.R. 1142)
- SIMPLE IRA improvements (Larson is the lead Democratic cosponsor of H.R. 3050)
- Permanent Extension of subpart F exception for active financing income (Larson is an original cosponsor of H.R. 961 - Permanent Active Financing Exception Act of 2015)
- CFC Look-Through extended for 5 years (Larson is an original cosponsor of H.R. 1430 - Permanent CFC Look-Through Act of 2015).
- Clarification of valuation rule for early termination of charitable remainder trusts (Larson is an original cosponsor of H.R. 4192)