On December 20, 2006, a bill was signed by Congress offering certain individuals tax relief. This bill is called Tax Relief & Health Care Act of 2006, and it was officially signed in the later part of the year and became effective in 2007. The biggest effect the bill had was that it allowed individuals to claim either local taxes and state taxes, or sales tax, as a deduction.
It provided for American tax relief in a number of areas. There are a few points provided in the bill which aim to help education by providing a subsidy. Also, tuitions and fees for higher education were made deductible. Most significantly, there are now deductions available for expenses a teacher incurs out-of-pocket for classroom supplies. Now, teachers are allowed up to $250 each year that they can claim as a deduction on their taxes. These deductions only apply to teachers for elementary and secondary schools. The old corporate tax credit for research and development was revised to take into considerations the changes in technology. This bill also provided for the establishment of the foundation for a Health Savings Account Program (HAS) for all Americans. This program allows citizens to be able to invest money in a non-taxable savings account that is earmarked only for health care. The deductions for an HAS can reach a maximum of $2,850 each year. The bill was designed to provide a sweeping effort in helping to relieve the tax burdens of millions of Americans.
Corporate Tax Relief signed by Bush
On October 22, 2004, a bill was signed providing corporations with an increase in tax relief. Signed by President Bush with very little announcement, the bill was actually the biggest tax revision that was passed during Bush’s administration. This bill itemized $136 million for new tax breaks, almost all for businesses. Many critics claimed that this bill rewarded the multi-national corporations that decide to move overseas. Bush responded by saying that the bill would help save manufacturers approximately $77 billion over a ten year period.
The bill provided many deductions not only for food producers, but for many top corporations. Unfortunately, the bill was also coupled with a $136 million worth of tax increases to keep our federal deficit from rising. Many Democrats accused the proponents of this bill of practicing creative accounting in order to hide the eighty-billion dollar actual cost. This bill was originally designed to repeal the illegal five-billion dollar (affirmed by the UN) tax break aimed at American exporters. The bill grew throughout the legislative process becoming one of the biggest in-scope tax reforms that has ever passed.
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