Rep. Cole Votes for Tax Extensions, Minimum Wage Increase and Permanent Estate Tax Relief

WASHINGTON – Congressman Tom Cole voted today for H.R. 5970, The Estate Tax and Extension of Tax Relief Act of 2006. This legislation includes extensions of certain business taxes, including extensions of tax provisions known as 45A and 168j that are extremely important to Oklahoma businesses. It also includes permanent estate tax relief and an increase in the minimum wage.

"Our economy is growing stronger everyday, but we must continue to implement policies to keep it moving in the right direction. This bill helps create a more business friendly environment by implementing and extending taxes to help businesses grow and to give them the ability to hire additional workers," Congressman Tom Cole said.

When fully implemented, H.R. 5970 will include a $5 million per person exemption on inherited estates, indexed for inflation. Estates with a value greater than $5 million and less than $25 million will be taxed at the capital gains rate, currently 15 percent. The capital gains tax rate will increase to 20 percent in 2011 if Congress does not act. Estates with a value greater than $25 million will be taxed at 30 percent when this provision is fully implemented in 2015.

“Death should not be a taxable event. The unfair death tax puts many family owned businesses and farms in jeopardy and undermines economic growth," Congressman Cole said.

This legislation also includes two tax extensions to help spur economic activity on Indian reservations and on former Indian lands. The first provision (45A) provides tax credits to employers of Native Americans and their spouses. The second provision (168j) provides 40 percent faster depreciation schedules for capital assets placed in service on former Indian lands in Oklahoma. Both provisions are extended through the end of 2007.

"The extension of these two provisions will continue to encourage economic growth in our state and create new jobs for all Oklahomans," Congressman Tom Cole said. "The accelerated depreciation provision in particular is worth hundreds of millions of dollars to our state."

When fully phased, H.R. 5970 in will increase the minimum wage from $5.15 an hour to $7.25 an hour--a forty percent increase. The minimum wage has not been increased in almost 10 years.

Increasing the minimum wage provides a balance to the important tax incentives for family businesses and for the continuity of those businesses across generations that were provided in this bill.

"I am pleased that this bill will take care of family businesses, Oklahoma employers and hard working Oklahomans," Congressman Tom Cole said. "Its a fair compromise for all concerned."

This legislation must now pass in the Senate.

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