The U.S. House of Representatives today passed a bill with support from Rep. Rick Larsen, WA-02, that preserves tax credits to help families and the middle class. H.R. 5771, the Tax Increase Prevention Act, extends for one year a variety of tax breaks that expired at the end of 2013, applying them to the 2014 tax year. Larsen also praised the country’s decreasing deficit and called for continued fiscal responsibility.

“Our country’s budget should reflect our shared value of opportunity for all, and it should do so in a balanced and responsible way. I have long called for a sane approach to our country’s fiscal policy, and I am happy to report that we are moving in the right direction. Over the last five years, our country’s deficit has fallen from $1.4 trillion to $483 billion. This means the deficit is down to 2.8 percent of our GDP, so we are getting closer to a world of budget sustainability.

“I voted in favor of this bill to support hardworking families who are putting their kids through college and to help low-income families afford housing. I am also pleased the bill extends the state and local tax deduction, which makes the tax code fairer for people in states like Washington that do not have an income tax. And it helps businesses invest in research and development, which are critical to the foundation of long-term economic growth that creates jobs and opportunity in Northwest Washington and across the country.

“But this bill is far from perfect. Sane fiscal policy would not be extending handouts to NASCAR and horse racing, as this bill does. These kinds of tax breaks used to be called earmarks. Rather than this piecemeal and last-minute approach to legislating, Congress should work on broad, long-term business tax reform that encourages economic growth and opportunity.

“While I am frustrated with Congress’ continued piecemeal approach to legislating, we cannot pin a higher bill on the middle class simply because Congress has yet again waited until the last minute to make decisions. People should have a clear understanding of what their taxes will look like, and I would like to see Congress work on longer-term solutions for the coming years,” Larsen said.

The tax agreement includes the following provisions:

• Extends the state sales tax deduction for 2014, allowing Washington residents to deduct the amount of sales tax they pay on their federal tax return.
• Provides for a tax credit to help low-income individuals afford housing.
• Equalizes tax benefits for employer-provided mass transit and parking options.
• Extends a tax deduction for individuals and businesses who make charitable donations of food items.
• Allows teachers to deduct certain supply expenses.
• Extends research and development tax credits for businesses.

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