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Posted: 9/27/2004 9:40:04 PM EDT
September 27, 2004

Kerry says tax bill includes hidden increase for combat troops

By Rick Maze
Times staff writer

Democratic presidential hopeful John Kerry said the tax relief bill passed by Congress last week includes what amounts to a $4,500 tax increase for troops in combat zones starting in 2006.

Kerry’s complaint about the Working Families Tax Relief Act is based on lawmakers’ decision to limit to two years a provision allowing tax-free money earned in a combat zone to be counted as earned income for those trying to qualify for the Earned Income Tax Credit.

The bill, HR 1308, passed the House and Senate on Thursday by large margins, 339-65 and 92-3, respectively. President Bush is expected to sign the bill soon.

“Due to a quirk in the tax treatment of combat pay, a service member can see their taxes go up just because they are serving in a combat zone,” Kerry said in a statement. “This tax increase can be up to $4,500 — so a National Guardsman serving in Iraq would be $4,500 worse off than a National Guardsman serving in Ohio.”

What Kerry didn’t say is that the $4,500 penalty existed before Congress acted, and that the bill has a provision for 2004 and 2005 that allows tax-free combat zone earnings, which include basic pay, special pays and bonuses, to count as earned income for the purpose of qualifying for other tax breaks.


This means service members — especially single parents and enlisted members who do not have much additional earned family income other than their military wages — will be better off when the bill, HR 1308, is signed into law than they would be without it, at least for this year and next.

Kerry noted, however, that Congress extended other, broader tax breaks in the bill until 2010 while giving just two years of tax breaks for the military.

“John Kerry would like to honor our soldiers overseas by ensuring they get adequate pay and health care — and do not face tax increases just because they are putting their lives on the line to defend America,” said a statement issued by his campaign. “He would permanently fix the combat pay problem by allowing service members serving overseas to include their income for the purpose of calculating their Earned Income Tax Credit (EITC) and the partially refundable Child Tax Credit.”

Kerry also would make all middle-class tax cuts permanent, the statement said, as part of a larger plan to reduce taxes for those making $200,000 or less a year.
Link Posted: 9/27/2004 9:52:55 PM EDT
These scumbag politicians always use the word "hidden" when referring to legislation. The FACT is, most of them never bother to read the fucking bill! They just vote on it based upon what the sponsor says it is.

I could probably sneak the text "Kerry is Ted Kennedy's cum dumpster" into the text of a bill and no one would notice.

What a piece of shit.
Link Posted: 9/27/2004 9:57:37 PM EDT
Kerry said something? I thought that everyone else spoke for him. Puppets are like that you know
Link Posted: 9/27/2004 10:02:08 PM EDT
September 23, 2004

Tax legislation would help troops in combat

By Rick Maze
Times staff writer

A pre-election tax package poised for approval by Congress has two provisions aimed at helping troops in combat.

Under the Working Families Tax Relief Act, service members trying to qualify for the Earned Income Tax Credit, worth $4,200 or more to someone with two or more children, or the Child Care Tax Credit, worth up to $1,000, will be able to include as income any military pay and bonuses that are tax-exempt due to service in a combat zone.

The tax bill was agreed to by House and Senate negotiators Sept. 23 and was set for quick and final passage by Congress on Sept. 24.

More than 10,000 people deployed to combat zones — the exact number is unknown — have been surprised to find their tax credits reduced, and sometimes eliminated, because their combat-zone tax exclusions have lowered their federal income tax below the level needed to qualify for the credits.

The Government Accountability Office, the investigative arm of Congress, noted the phenomenon in a May report to Congress, saying that single parents or service members whose spouses had little income were most likely to be hurt. The report noted that 10 percent of enlisted members were affected, especially if they spent six months or more of a calendar year in a combat zone.

Another unexpected result of combat zone service was that some officers who never before qualified for the Earned Income Tax Credit, which is targeted to the working poor, found they qualified because their taxable income had dropped while serving in a war zone.

The military provisions of the tax bill would apply only for tax years 2004 and 2005, which drew complaints from Senate Democrats who wanted to make the change permanent.

Doing so “should be an easy choice,” said Sen. Max Baucus, D-Mont. “Instead we are penalizing them for fighting in the most dangerous areas of the world.”

Baucus and Sens. Blanche Lincoln and Mark Pryor, both from Arkansas, tried but failed to get the revised rules made permanent during last-minute negotiations on the bill. The 2006 cutoff for the special military eligibility rules is especially galling to Democrats because the bill extends the child tax credit and marriage penalty tax relief that apply to all taxpayers through 2010.

The entire tax package has a $146 billion price tag over 10 years, with the two military provisions accounting for just $199 million.

While Democrats were fussing, Joyce Raezer of the National Military Family Association said she was just happy Congress had acted.

“This is the fix we need,” she said. “It doesn’t matter if it lasts for one year or two years. It can always be extended. The bottom line is that folks should not be made ineligible for tax credits because the government deployed them to a war zone.

“When you see examples of single moms losing money and colonels making money, you know something isn’t working right,” Raezer said.

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