Washington, D.C. – Today Congresswoman Cheri Bustos voted to help pass H.R. 2029, a comprehensive tax extenders package that will preserve tax cuts for working families while providing economic incentives that will help local manufacturers like Caterpillar and John Deere grow. The bill, which passed by a bipartisan vote of 318 to 109 has received the support of President Obama and is expected to be signed into law after a vote in the Senate.
“I was proud to cast my vote in support of tax cuts for working families and tax credits to spur sales for manufacturers like Deere and Caterpillar,” said Congresswoman Cheri Bustos. “Families with children received an average tax return of over $3,000 through the Earned Income Tax credit in 2013, so I’m very pleased we were able to protect this tax cut into the future. I’m also very pleased that we were able to provide additional tax incentives which will make it much easier for farmers and small businesses to purchase heavy machinery from manufacturers like John Deere and Caterpillar. We also have an obligation to help our veterans make the successful transition to the workforce which is why I worked to include language from my Jobs for Heroes Act to spur the hiring of veterans. With tax incentives for wind farms and solar energy facilities across Western Illinois and a provision to stop the medical device tax from taking effect next year, this tax extenders package represents a bipartisan compromise that will help grow our local economy.”
The package includes tax credits to benefit:
- Strengthening Working Families: The package permanently extends the child tax credit (CTC), the earned income tax credit (EITC) for low- and moderate-income workers. It extends the American Opportunity Tax Credit (AOTC), which makes it easier for students and families to pay for college. It also permanently restores parity between the transit tax benefit and parking benefits so that those who carpool or take public transit benefit the same way as those who drive to work, a provision Congresswoman Bustos advocated for.
- Nationally, the Federal Earned Income Tax Credit returned an average of $3,074 to families with children in 2013 according to the Center for Budget and Policy Priorities.
- Keeping our Promise to Veterans: Permanently extends the 20-percent Employer Wage Credit (EWC) for employees called to active military duty and expands it to employers of any size beginning in 2016. Extends the Work Opportunity Tax Credit (WOTC), which promotes hiring veterans and service members who have traditionally faced significant barriers to employment – for five years. These job-creating tax credits will put veterans to work in our district and provide our businesses with talented, skilled and dedicated workers.
- The Jobs for Heroes Act, which was introduced by Congresswoman Bustos, called for making both of these tax credits permanent and extending the WOTC to apply to members of the Ready Reserve and National Guard. Language from this bill was included in the Tax Extenders bill.
- Bolstering Local Businesses and Agricultural Producers: The tax extenders package permanently increases the maximum amount farmers and small business owners can deduct for depreciation of items like machinery under Section 179 to $500,000. It also raises the cap on a taxpayer’s Section 179 deductions to $2 million and indexes both of these limits to inflation. Finally, it extends bonus depreciation for five years, although it includes a phasedown from 50 percent to 30 percent over that period. Because these provisions influence purchasing decisions for equipment, they benefit not just the district’s farmers but also manufacturers like John Deere and Caterpillar.
- Investing in Renewable Energy: Extends the Production Tax Credit (PTC) for wind and solar projects that are up and running or break ground before the end of next year. Also includes a two-year extension for the $1.00 per gallon tax credit for biodiesel and a producer credit for next generation biofuels.
- Charitable organizations: Permanently extends the ability of seniors to distribute up to $100,000 from IRAs tax-free to qualified charitable organizations in a given tax year, spurring more investment in local non-profit organizations and colleges.
- Driving Down the Cost of Healthcare: Suspends the medical device excise tax for two-years, benefitting medical research and development.
Additional background on the Earned Income Tax Credit and Child Tax Credit from the Center on Budget and Policy Priorities in Illinois:
- 1,048,000 Illinois households received the EITC in 2012.
- 826,000 Illinois households received the low-income part of the CTC in 2012.
- 478,000 Illinoisans were lifted out of poverty by the EITC and CTC, including 252,000 children, each year, on average, during 2011 to 2013.
- The EITC put about $2.5 billion into Illinois’s economy in 2012.
- Research has also found that children in families who get an income boost from the EITC and CTC quickly show improvements in health and school performance relative to other low-income children who did not receive this extra help. In addition, children whose families receive that boost have higher school test scores, on average, and are more likely to go to college and to work and earn more as adults.
- In 2013, nearly 128,000 families outside of metropolitan areas in Illinois received the EITC or the low-income part of the CTC. If policymakers don’t renew expiring provisions of the EITC and CTC, more than 67,000 Illinois rural families will lose some or all of their credits at the end of 2017.
- In 2012, about 62,000 Illinois veteran and military families received the EITC or the low-income part of the CTC. If allowed to expire at the end of 2017, 29,000 of these Illinois veteran and military families will lose some or all of their credits.