Working families can breathe a sigh of relief. The president visited Iowa in early October to sign into law key tax relief items aimed squarely at lower- and middle-income wage earners. For the fourth time in as many years, Congress continued its efforts to let workers pocket more of their hard-earned paychecks.
The Working Families Tax Relief Act of 2004 extends a $1,000 per-child tax credit for another five years, continues relief for married couples who would otherwise face higher taxes under the tax code than they would filing as two unmarried individuals, allows taxpayers to enjoy the 10 percent income tax bracket for another six years, and accelerates the refundability of the child tax credit for low-income families for another year.
The new tax law also spells good news for Iowa’s budding renewable energy enterprises. Now investors and farmers are certain that the federal tax credit for producing electricity from wind, biomass and poultry waste is a sure thing for the next year. Plans that are on the drawing board can continue full steam ahead.
That includes a new $323 million wind farm in northwest Iowa. The 100 wind turbines planned for the project would generate enough electricity to power roughly 85,000 homes. Harnessing Iowa’s unlimited supply of wind to make electricity makes sense. And it creates jobs in our rural communities.
As chairman of the Senate Finance Committee, which handles federal tax policy, I led the charge to extend the federal tax incentive for renewable energy. I also championed the bipartisan effort to extend the tax breaks that make it easier for families to make ends meet and keep more of the money they’ve worked so hard to earn.
Since 2001, Congress has passed and the president has signed a series of tax relief measures designed to trigger economic growth and create jobs. We’ve worked to shift the nation’s money from the government that spends it to the people who earned it. By easing the tax burden on individuals and small businesses, policymakers understand the underpinnings of a dynamic economy. More money in people’s pockets unleashes a positive chain reaction.
More take home pay helps parents save for college and workers save for retirement. Tax relief helps families pass businesses and farms from one generation to the next. Small businesses have a better opportunity to grow and create jobs. It’s simple. Tax relief means more take-home pay for working families. And that means folks can save, spend and invest more of their own money.
During my county meetings across the state in the last year, many Iowans raised concerns about deficit spending by the federal government. Some wonder how we can "afford" tax cuts. I agree the terrorist attacks of Sept. 11 added significantly to the government’s spending needs. Paying for the war on terrorism required more resources to beef up national security and support U.S. troops.
As a lifelong Iowa, I share concern about adding to the national debt. Spending beyond one’s means is not something I take to lightly. Debt shifts the burden to future generations. But when America is at war, we must spend what it takes to win the war and keep the peace. Winning the war on terrorism is about ensuring a better future for our children and grandchildren.
But don’t forget a strong economy will help erase the deficit. By growing the economy, we generate more federal revenue. Tax relief boosts economic growth, generates jobs and increases tax revenue.
Another way to bridge the spending deficit is by bridging the tax gap. As a tax cutter, I want folks to keep more of their own money. But I also want to make sure all taxpayers pay their fair share. That’s why I’m working to rein in abusive tax shelter schemes and beef up whistleblower protection for those who expose tax cheats to the IRS.
In the meantime, Iowans will continue to benefit from the tax breaks extended by the Working Families Tax Relief Act of 2004. Thanks to the president’s signature on my bipartisan bill, Iowans can continue to count on tax relief that extends the child tax credit, relieves the marriage tax penalty and continues the 10 percent tax bracket.