Rep. Joe Donnelly

Rep. Joe Donnelly

In recent months, taxpayers across the state of Indiana have begun to experience the financial consequences of our state’s broken property tax system. Yet, for many folks, this year’s inflated property tax bill serves as just one more example of the economic squeeze on America’s middle class. From the rising cost of gas prices and health care to housing and college tuition, Hoosier families are working harder just to make ends meet.

As your congressman, I believe middle-class tax relief is of critical importance to what should be one of our country’s top priorities: strengthening the middle class. That is why I was pleased to recently vote for The Temporary Tax Relief Act. Named for the temporary one-year provision that would protect over 33,000 Second District taxpayers from an unexpected tax increase under the Alternative Minimum Tax, this legislation also would provide additional tax relief to Hoosier families where they need it the most.

For example, a key provision in this legislation would provide much-needed relief from Indiana’s rising property taxes. Under the bill, Hoosier property owners who claim the regular standard deduction would be allowed to claim an additional deduction on their federal income taxes for state and local property taxes. Specifically, the legislation would allow joint filers to claim up to $700 of their property tax liability and single filers to claim up to $350.

While it is ultimately up to the governor and the Indiana General Assembly to fix our state’s property tax crisis, this legislation would provide important relief to thousands of Second District families who are currently paying higher property taxes than ever before.

In addition, The Temporary Tax Relief Act also recognizes the rising costs of raising and educating our children. Today it is estimated that most middle-class families will spend nearly $185,000 raising a child from birth to the age of 17, and many of those families will find that the rising cost of four-year public colleges or universities have priced their children out of a higher education.

To address these challenges, the recently passed legislation would increase the eligibility threshold for the popular child tax credit. This $1,000 tax credit is available to any taxpayer making more than $11,000 who claims as a dependent a child under the age of 17. By adjusting the credit’s qualifying income threshold from $11,000 to $8,500, the bill would not only extend benefits to the parents of an additional 58,568 Hoosier children, but would also increase the refundable benefit received by parents of over 202,000 children across our state.

Furthermore, the legislation also would make college more affordable by extending a tax deduction for qualified tuition and other education expenses. Under the bill, taxpayers would be allowed to deduct up to $4,000 of tuition and education-related expenses, helping to make certain that college is an option for more middle-class families.

Equally as important, this legislation proves that we can provide critical tax relief without adding to our nation’s mounting national debt. In order to comply with the House of Representative’s pay-as-you-go rules, the tax package is paid for by closing a loophole that allows wealthy Wall Street managers to have their income taxed at a significantly lower rate than working Americans. By simply ensuring that all taxpayers are treated equally, we are able to direct billions of dollars of tax relief to help ease the burden on middle-class America.

As your congressman, I will continue to support efforts to provide middle-class tax relief. However, we must also remain keenly aware of the budgetary challenges facing our nation. While a responsible fiscal strategy can be achieved by restoring fairness and equity to the tax code, I believe it must also include efforts to eliminate wasteful spending. That is why earlier this year I voted against the Fiscal Year 2008 budget resolution, which authorized congressional spending at levels that would outpace the rate of inflation. Furthermore, I have voted 23 times to cut spending by a total of over $5 billion from appropriations bills passed by the House of Representatives.

It is my hope that by eliminating wasteful spending and reforming the tax code, we can return these savings back to middle-class taxpayers. This is what we have accomplished with The Temporary Tax Relief Act, and I look forward to working with my colleagues in the Senate and with the president to see this important tax relief signed into law.

Joe Donnelly, D-Ind., represents Kokomo, as well as Carroll and Cass counties, in the U.S. House

of Representatives.

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