Rockefeller:?Deal continues cuts
Sen. Jay Rockefeller, D-W.Va., on Thursday highlighted how the fiscal cliff deal Congress passed will cut taxes for 99.7 percent of West Virginians and continue many specific tax credits to spur business growth and economic investment, and to help thousands of West Virginians keep more money in their pockets.
The fiscal cliff deal includes important tax cuts for low and middle income families to reduce the burden on them, while insisting that the wealthy finally pay their fair share. Because of this bill, only individuals who make over $400,000 or families that make over $450,000 will see tax rates return to Clinton-era levels.
“West Virginia families work hard, but many still struggle to get by,” said Rockefeller. “Our economy has begun to recover, but we still have further to go, and many West Virginians have yet to feel any improvements. This bill makes sure hundreds of thousands of West Virginians continue to get much of the help they received before – by extending tax cuts for middle class families, while also continuing tax credits that are proven lifelines for so many West Virginians.
“If Congress had failed to pass this bill, tax credits that help low and middle income West Virginia families pay their bills and afford college would have disappeared. I refused to let that happen, despite warped efforts by House Republicans to place more of the burden on those already hurting. Instead, this bill takes solid steps toward narrowing the income divide between the very wealthy and those who work but struggle every day, especially in a tough economy. From the beginning, I made clear that I would work to protect crucial safety nets for so many West Virginians, and this bill does that.
“I realize that reports on the bill have been confusing. For example, one of the items not included in this deal is an extension of the payroll tax cut, which I believe should have continued temporarily in a way that still protected Social Security. But, even without the payroll tax cut, the facts are very clear this bill significantly benefits West Virginians and the net total puts more money in West Virginians’ pockets.”
Because of the fiscal cliff deal, West Virginians will continue receiving the following tax credits. Without a deal, these tax credits would have disappeared, and West Virginians’ taxes would have gone up starting January 1.
Tax cuts for individuals and families in the fiscal cliff deal:
– Earned Income Tax Credit (EITC) – The fiscal cliff deal continues for five years the EITC, which is a refundable federal tax credit that helps put money back in the pockets of low-income working individuals and families, and makes taxes a little fairer for low-income workers. In 2011, almost 160,000 working West Virginians benefited from this tax credit, receiving $329 million in returns to the state, which will now continue, averaging more than $2,000 per person.
– Expanded Child Tax Credit – The fiscal cliff deal protects 102,000 West Virginia children and their families from losing the tax credit which will continue for five years. This tax credit is for low and middle income families to help offset the cost of raising a child. It allows families to claim as much as $1,000 per child.
– American Opportunity Tax Credit – The fiscal cliff deal extends for five years this tax credit which helps students and families afford the cost of college. In 2011, 33,000 West Virginians received a total of $64 million, averaging almost $2,000 per person. This is a refundable tax credit and is good for all four years of college. It can be used to pay for textbooks and other fixed costs associated with attending college in addition to tuition.
– Alternative Minimum Tax (AMT) patch – The AMT was enacted to guarantee that wealthy individuals could not escape taxation. This tax was never indexed for inflation, and so the AMT “patch” indexes it for inflation each year so that middle class taxpayers are not forced to pay it. 10,121 West Virginians paid the AMT in 2010. The fiscal cliff deal permanently patched the AMT, which has in the past been an annual exercise, protecting almost 50,000 more West Virginians who would otherwise be forced to pay it this year.
Tax cuts for economic development, mine safety, and school construction:
– New Markets Tax Credit (NMTC) – The fiscal cliff deal continues for 2012 and 2013 returns this tax credit, which has a proven history of promoting investment and economic growth by helping bring needed private sector capital to low-income and rural communities across the country. Since 2003, the NMTC has provided over $55 million in new investment in West Virginia projects and communities, including for local coal mines, hardware stores, and child day care services centers, among others. The NMTC has also created more than 300,000 jobs in low income and rural communities since it was created. Rockefeller wrote the original legislation creating the NMTC and fought successfully for its expansion in the American Recovery and Reinvestment Act in 2009.
– Mine Rescue Team Training Credit – The fiscal cliff deal continues for 2012 and 2013 returns this tax credit, which provides up to $10,000 for coal companies and mine operators for the training of mine rescue team members, and gives coal companies incentives to make crucial investments in equipment and training that will help coal miners return safely from work each day. A tax credit of this size offsets approximately 20 percent of the cost of preparing a miner to be ready to rescue his colleagues. Rockefeller introduced this tax credit which was first enacted in 2006.
– Election to Expense Advanced Mine Safety Equipment – The fiscal cliff deal continues for 2012 and 2013 returns this tax credit, which enables coal companies to immediately expense 50 percent of the cost of purchasing new life-saving safety equipment to make sure miners are protected. Several types of safety equipment are eligible for the tax benefit including communications technology that enables miners to maintain constant contact with an individual above ground; electronic tracking devices that enable an individual above ground to locate miners underground at all times; emergency breathing apparatuses including devices carried by miners and additional oxygen supplies stored in the mine; and mine atmospheric monitoring equipment to measure the levels of carbon monoxide, methane and oxygen in the mine at all times. Rockefeller introduced this tax credit which was first enacted in 2006.
– Short Line Rail Track Maintenance Credit – The fiscal cliff deal continues for 2012 and 2013 returns this tax credit, which incentivizes short lines rail companies to invest in track rehabilitation by providing a credit of 50 cents for every dollar spent on track improvements. West Virginia is the country’s second largest producer of rail ties.
This tax credit would mean better, safer railroad tracks and more reliable, competitively priced railroad service for companies to transport their products. It is particularly important for rural areas like West Virginia where short line service is often the only railroad service available for many companies trying to ship their products.
– Qualified Zone Academy Bonds (QZAB) – The fiscal cliff deal continues for 2012 and 2013 returns these tax credits, which are targeted to help disadvantaged communities afford school construction and renovations. Studies have shown a relationship between the condition of school buildings and the performance of students.
Unemployment benefits for jobless workers:
– Federal unemployment benefits – In addition to tax credits, the fiscal cliff deal also continues for this year federal benefits for approximately 10,000 West Virginians who are actively looking for jobs so they can pay their bills and put food on the table for their families. There are another 29,000 jobless West Virginians who are currently receiving state benefits, and if needed after that time, will now be able to receive federal benefits until the end of 2013.