Rep. Cole Votes to Prevent Tax Increase on American Families and Small Businesses

WASHINGTON –On the heels of thirty one consecutive months of uninterrupted job growth, Congressman Cole voted today to avert tax hikes on the Alternative Minimum Tax (AMT), capital gain dividends and the extension of increased small business expensing. The Tax Increase Prevention and Reconciliation Act of 2005 will prevent a tax increase on small business owners, seniors and married couples.

"The economy is growing; over two million jobs have been created in the last year. I believe these good economic indicators are a result of tax incentives that give more money back to hard working Americans and allow businesses to grow and hire additional workers. This legislation extends tax cuts that are vital to the continued growth of our economy," Congressman Cole said.

Over 220,000 Oklahomans will benefit from reduced tax rates on capital gains and corporate dividends proposed in this bill.

"An overwhelming majority, 63 percent, of Oklahoma's believe that these tax cuts are helping the economy according to a poll by Rasmussen Report. We must continue to implement pro-growth policies that will keep our economy going in the right direction," added Rep. Tom Cole.

The Senate is also expected to pass this legislation this week. The legislation will then be sent to the President.

The Tax Reconciliation Bill will:

Ø Extend capitol gain/dividend for an additional two years. Mutual fund holders who designate part of its dividends as capitol gain distribution will benefit from the provision.

Ø Prevent an increase on the Alternative Minimum Tax (AMT) for an additional year. AMT is an additional tax some people have to pay on top of the regular income tax, especially two parent families who live in high-taxed states.

Ø Extend Section 179 of the Tax Code providing for continued Small Business expensing. Under current law, small businesses may expense up to $100,000 of investments in depreciable assets, without action, the expensing limit would have declined to $25,000.

Ø Dividends: Extends for two years the lower tax rate on dividend income, thus preventing a $13 billion tax increase over the next four years. Fifty percent of taxpaying senior citizens will benefit from this extension.

Ø Capital Gains: Extends for two years the lower tax rate on capital gains income, thus preventing a $7 billion tax increase over the next four years. Nearly 1 in 3 senior citizens will benefit from this tax relief.

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