Tax Relief For Texans


In: All News   Posted 05/23/2003
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WASHINGTON – The U.S. Senate on Friday passed H.R. 2, the Jobs and Growth Tax Relief Reconciliation Act of 2003, a bill that provides tax relief to more than 6 million Texas taxpayers. The legislation also provides nearly $1.3 billion for state fiscal relief to Texas. U.S. Sen. John Cornyn, a member of the Senate Budget Committee, praised Senate efforts to speed relief to Texas, and the state’s taxpayers."More than 6 million Texas taxpayers and their families will see a direct benefit from this growth package, allowing Texans to keep more of what they earn, and for Washington to take less,” Cornyn said. “More than 1.4 million businesses can use their tax savings to invest in new equipment, create new jobs, and increase pay. This is exactly the growth we need, and I’m happy to say that it’s on the way.” the bill also provided $20 billion to the states for FY 2003 and 2004; $1.288 billion will be provided to Texas. As originally written, the state aid would have provided an unbalanced share to smaller states, but Cornyn worked with Sen. Kay Bailey Hutchison to ensure that Texas received its fair share. "The initial proposal was to disproportionately help smaller states with smaller populations, less unfunded mandates and smaller budget problems,” Cornyn said. “We essentially dug in our heels until we secured an appropriate allocation for Texas.” the $1.288 billion in fiscal relief for Texas includes $571 million in Federal Medical Assistance Percentage (FMAP), the federal government’s share of a state’s expenditure for Medicaid, and $717.5 million in flexible grants. The grants can be used to provide essential government services, or to cover state costs in complying with unfunded federal mandates. the Treasury Department estimates that 6.05 million Texans will benefit from the tax relief, including 4.43 million who will see a savings from the acceleration of the 10 percent tax bracket; 2.44 million who benefit from an easing of the Marriage Penalty; 1.8 million who will receive an increase in the child tax credit (including a $400 per child rebate this summer); and 1.69 million will benefit from the reduction in dividends and capital gains taxes. the House of Representatives passed the bill early Friday morning, it now moves to the President for his signature. Further information on tax relief package follows - the JOBS AND GROWTH PACKAGE WILL PROVIDE BENEFITS TO 6,000,000 TEXAS TAXPAYERSREDUCING TAXES•Over 6 million taxpayers in Texas will have lower income tax bills in 2003 under the President’s growth package. More than 1.4 million business taxpayers can use their tax savings to invest in new equipment, hire additional workers, and increase pay. ACCELERATE 10-PERCENT BRACKET EXPANSION•More than 4.0 million married couples and single filers will benefit from the acceleration to 2003 of the expansion of the 10-percent bracket scheduled for 2008. ACCELERATE REDUCTION IN INCOME TAX RATES•More than 1.7 million taxpayers in Texas will benefit from the acceleration to 2003 of the reductions in income tax rates in excess of 15-percent scheduled for 2004 and 2006. ACCELERATE REDUCTION IN MARRIAGE PENALTY•Over 2.4 million married couples in Texas will benefit from the acceleration to 2003 of provisions that increase the standard deduction for joint filers to double the amount for single filers and increase the width of the 15-percent bracket to twice the width for single filers. These two provisions were scheduled to phase in between 2005 and 2009. ACCELERATE INCREASE IN CHILD TAX CREDIT•More than 1.8 million married couples and single parents in Texas will benefit from the acceleration to 2003 of the increase in the child tax credit from $600 to $1,000 that was scheduled to phase in between 2005 and 2010. EXCLUSION FOR CORPORATE DIVIDENDS•More than 1.6 million taxpayers in Texas will benefit from the reduced tax rates on capital gains and dividends. SOURCE: Counts are for the number of returns filed in 2001 that would have benefited from the package. These estimates are based on tabulations from all individual income tax returns processed by the Internal Revenue Service in 2001. Most of these returns covered tax year 2000. State Fiscal Relief the $20 billion in aid to the states is included in the conference report, as originally passed by the Senate. For FY 03, $7,730 billion in fiscal relief will go to the states, with $12,270 more in FY 04. For Texas, the bill will provide an estimated $1.288 billion over FY 2003 and FY 2004. Estimated funding by fiscal year and category is as follows: $579.15 million in FY 2003 ($220.4 FMAP and $358.75 in flexible grant) $709.75 million in FY 2004 ($351 FMAP and $358.75 in flexible grant) Total: $1.288 billion the package includes a temporary 2.95% Federal Medical Assistance Percentage (FMAP) increase over five quarters (2 quarters in FY 2003 and 3 quarters in FY 2004). The flexible grant funds can be used to provide essential government services or to cover state costs in complying with unfunded federal mandates.