Originally created 09/22/05

Katrina victims get tax breaks

WASHINGTON - The House approved a $6.1 billion package of tax breaks Wednesday to help families recover from Hurricane Katrina and to urge Gulf Coast businesses to reopen their doors, or at least keep employees on the payroll.

The House passed the bill 422-0 as the Bush administration urged residents to get out of the way of another approaching storm, Hurricane Rita, threatening Louisiana and Texas.

The vote sent the bill to the Senate, where lawmakers hoped to quickly give their final approval. The package offers tax assistance to people and businesses displaced by Hurricane Katrina and expanded tax breaks for some charitable donations to help them.

"This aid comes at exactly the right time to help victims of Hurricane Katrina as they rebuild their lives," Treasury Secretary John Snow said.

Rep. Jim McCrery, R-La., said tax writers aimed most of their assistance at individuals, and the tax breaks for businesses mean "those businesses, we hope, will be employing and paying residents of the affected area."

Lawmakers intend to follow the immediate aid with a broader package of tax breaks to urge rebuilding of damaged infrastructure and commerce, particularly in New Orleans. President Bush proposed creating a Gulf Opportunity Zone with about $2 billion in special tax breaks urging businesses to build or expand in the region.

Congress first responded to the hurricane's blow by spending more than $62 billion for recovery and rescue efforts. The price tag, expected to increase, has caused wrangling within the GOP over whether to cut government spending elsewhere to defray Katrina's costs.

Speaker Dennis Hastert, R-Ill., rejected calls to delay a Medicare prescription drug benefit or rescind recently passed highway projects, but a band of almost two dozen conservatives announced proposals to take both steps. The conservatives claim momentum as the costs of Katrina have put a renewed focus on the deficit.

"We do not have to raise taxes" to finance the recovery from Katrina, said Rep. Jeb Hensarling, R-Texas.

The group of House conservatives announcing "Operation Offset" before television news cameras acknowledged that they had no agreement among themselves on a more than $500 billion roster of ideas to cut spending.

house aidThe House on Wednesday passed a $6.1 billion package of tax breaks to help people and businesses hit by Hurricane Katrina. These are the major provisions: - Establishes special rules for the earned income tax credit and child tax credit to protect the credits for taxpayers who lost jobs or whose families separated, disruptions that can shrink or eliminate those benefits. - Waives taxes imposed when debts, such as mortgages, are forgiven. - Creates a special $500 tax deduction for people who house evacuees, rent-free, for at least two months. - Allows individuals to write off all of their unreimbursed casualty losses. - Waives a 10 percent penalty for early withdrawals from retirement accounts up to $100,000. - Applies the Work Opportunity Tax Credit to businesses in the disaster zone for hiring over the next two years. - Offers a tax credit to smaller employers shut down by the hurricane that continue to pay their employees. - Temporarily increases tax-deductible contribution limits for individuals and businesses. - Temporarily expands tax breaks for food and book donations.- Associated Press


Trending this week:


© 2018. All Rights Reserved.    | Contact Us