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Yarmuth Announces Proposal to Increase Child Tax Credit

 

Provision is Yarmuth’s fourth favored by leadership to be included in bipartisan stimulus plan


(Washington, D.C.) Today, Congressman John Yarmuth (KY-3) announced that leadership is now considering the inclusion of four of his measures in the bipartisan economic stimulus plan.  The latest proposal increases the child tax credit by $300.  The announcement follows the introduction of  two provisions to stimulate job-growth through tax incentives for small businesses and a tax cut for 7.5 million low income workers.

“I’ve urged House leadership, to focus on boosting small businesses, the backbone of the economy, providing relief for those who need it most: low-income workers and struggling families,” Yarmuth said.  “These provisions will help get local businesses the resources they need to survive the difficult times, expand, and create new jobs.  It’s an agenda that will create a ripple effect that will get people working, earning, and spending more money that they are now throughout the Louisville community and the nation.”

Yarmuth’s four provisions are detailed below:

Increasing the Child Tax Credit by 30 percent

Couples making less than $110,000 per year are currently eligible for a $1,000 tax credit per child each year—a provision from which 360,000 Kentucky benefit.  Yarmuth’s proposal increases the tax credit by $300 for 2007 returns, immediately providing cash to working families struggling to make ends meet.

Doubling write-offs for business expenses
Yarmuth joined with Melissa Bean, Chairwoman of the Subcommittee on Tax and Finance, to propose raising the small business expense write-off limit from $125,000 to $250,000 for 2008.  This provision encourages business owners to seize the moment and expand—purchasing more equipment and creating new jobs.

Extending the Net Operating Loss (NOL)

The NOL carryback currently allows proven businesses that are losing money this year to spread their loss out by amending the prior two years’ tax filings in profitable years, earning them an instant refund on taxes previously paid.  This provision will extend the NOL from two years to five years, allowing small businesses to survive despite the struggling economy.

Cutting taxes for 7.5 million workers
In June, Yarmuth introduced legislation that would extend the Earned Income Tax Credit (EITC) to single childless workers making less than $16,400 a year.  In addition to lifting 250,000 workers out of poverty, the legislation will cut taxes for 7.5 million American workers by as much as 41 percent.