Q: What’s included in your tax bill to help those serving in the U.S. military?
A: As our men and women in uniform are being called upon to fight the war on terrorism, there’s no time like the present to make sure these brave Americans get a fair shake under the federal tax code. The Armed Services Tax Fairness Act of 2002 would fix problems in the tax code that affect personnel in the uniformed services and foreign service, including reservists and members of the Army National Guard. For starters, my bipartisan bill would recognize that it’s unrealistic for a lot of people in the military to take advantage of the homeowner’s capital gains tax exclusion that passed in 1997. That’s because they are frequently transferred and to qualify for the tax benefit, an individual needs to live in the home for at least two to five years before the sale. A special rule would be used to address their unique circumstance. In addition, the $6,000 death benefit paid to a surviving spouse of a soldier killed while on active duty would be excluded from taxable income. Plus, child-care benefits provided to military personnel also would be excluded from income.
Q: How does your bill benefit reservists and members of the National Guard?
A: Ask any active duty member or reservist in Iowa, and I bet he or she would be able to recount their out-of-pocket expenses shelled out for travel and lodging during their weekend drills. Generally, these expenses are non-deductible for one of two reasons: either the reservist doesn’t itemize, or the expenses don’t exceed two percent of the reservist’s adjusted gross income. For whatever the reason, I believe hard-working members of the National Guard deserve a break on these expenses. My bill would establish an above-the-line deduction for un-reimbursed travel expenses so reservists aren’t put in a position to subsidize their own training. The House passed a similar military tax relief bill this summer. For the sake of those defending freedom around the world, including the 799 Iowans who are on active duty in the National Guard and reserves, I hope the Democratic leadership in the Senate will see fit to pass my bill before Congress adjourns this fall.