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.WHAT A FUCKING LYING ASS.
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.