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Thune Votes to Prevent Massive Tax Hikes on South Dakota Families, Small Businesses

Tax Relief Package Passes the Senate 54 to 44

May 11, 2006

Washington, DC —  Senator John Thune (R-SD) today voted in favor of the Tax Increase Prevention and Reconciliation Act of 2005, a tax relief package that would prevent major tax hikes on American families and small businesses. The package would ensure that current tax rates do not increase and would extend reduced rates on capital gains and dividends, so more Americans can invest and save for their retirements and children's education.

"Passage of today's tax relief package is a tremendous victory for South Dakota families, seniors and small businesses," Thune said. "Continuing the economic growth and job creation spurred by Republican-led tax relief in 2001, 2003 and 2004, today's tax relief package will protect all Americans from major tax hikes and provide them with even lower rates when investing and saving for their future.

"Today's package will extend relief from the Alternative Minimum Tax for all Americans-an outdated and burdensome tax that was created 30 years ago under different economic conditions. It will also strengthen small businesses by preventing their expensing limit from shrinking in 2008, and instead, extending that limit. Extending the expensing limit will greatly benefit small businesses, a key job provider and driving force in our nation's economic growth.

"With 32 straight months of job growth, 5.3 million jobs created since August 2003, and homeownership at a record high, tax relief has proven to go hand-in-hand with a strong and prospering economy. Today's vote divided those who support the economic policies that have led to this tremendous growth from those who would rather raise taxes. I am committed to continuing tax relief and sending as many tax dollars as possible back into the pockets of hard-working South Dakotans, not Uncle Sam."

Among other provisions, the Tax Increase Prevention and Reconciliation Act will do the following:

  • Extend alternative minimum tax relief for an additional year;

  • Extend the increased limit on small business expensing through the end of 2009;

  • Extend the lower tax rate on dividend income through 2010; and

  • Extend the lower tax rate on capital gains income through 2010.

The U.S. economy is growing at record speed as a result of Republican-led tax cuts:

  • The U.S. economy bounded ahead in the opening quarter of this year at a 4.8 percent pace, the fastest growth rate in 2.5 years. The economy has been growing for 17 straight quarters, and the average growth last year was 3.5%.

  • 211,000 jobs were created in March, 2.1 million jobs over the past 12 months, and more than 5.1 million since August 2003.

  • The unemployment rate has fallen to 4.7% -- lower than the average of the 1970s, 1980s, and 1990s.

  • Led by strong home values and a steadily rising stock market, household wealth is at an all-time high, reaching $52.1 trillion in the fourth quarter of 2005.

  • Homeownership remains very close to its all-time high of more than 69 percent in early 2005.