[Congressional Record Volume 141, Number 4 (Monday, January 9, 1995)]
[Extensions of Remarks]
[Page E62]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            INTRODUCTION OF DISASTER TAX RELIEF LEGISLATION

                                 ______


                         HON. HOWARD L. BERMAN

                             of california

                    in the house of representatives

                        Monday, January 9, 1995

  Mr. BERMAN. Mr. Speaker, today I am proposing legislation that would 
permit disaster victims to deduct 100 percent of their casualty losses 
when calculating their Federal personal income taxes.
  I first introduced this bill in the last Congress after seeing the 
destruction caused by the Northridge earthquake and after talking with 
hundreds of its victims. I realized then that present tax law is 
clearly inadequate in disaster of this magnitude. The Tax Code 
acknowledges that it is appropriate to deduct uninsured property 
losses, but the deduction doesn't kick in until losses exceed 10 
percent of adjusted gross income.
  Since this legislation was first introduced, I have received hundreds 
of phone calls and letters from people who are still reeling from the 
earthquake. Nearly a year has passed, but victims are still finding it 
difficult to find the money to repair the damages suffered.
  The legislation I am introducing would particularly help middle-class 
taxpayers who suffer substantial damage, but who earn too much to 
qualify for Federal grants and face tens of thousands of dollars in 
repair bills.
  The bills would apply only in cases of federally declared disasters. 
When an emergency is great enough to prompt the President to declare a 
disaster and to determine that aid from the Federal Government is 
warranted, then stricken taxpayers surely deserve this break on their 
Federal income taxes.
  The Joint Committee on Taxation estimates that this legislation would 
cost approximately $22 million annually.
  Congress appropriated more than $8.6 billion to help defray the 
estimated $15 to 20 billion cost of the earthquake. The estimated 
revenue loss to the Treasury is very small compared to the significant 
middle class tax relief this bill would provide to tens of thousands of 
taxpayers who have to dip into their savings or go into additional debt 
to repair their homes.
  The bipartisan task force on disasters, appointed by the leadership 
of the House to recommend improvements in the Nation's disaster 
strategy recognized the importance of improving the ability of 
individuals, businesses, and communities to recover from disasters by 
providing resources needed to rebuild. The task force's report included 
a recommendation that Congress consider this legislation.
  Every dollar taxpayers have to send to Washington is a dollar not 
spent in their devastated local communities. They could spend that 
money putting contractors and builders to work, or they could use it in 
local stores to buy items to replace damaged possessions.
  It's both good economic policy and good sense to put every possible 
dollar to work to help ravaged areas rebound from disaster. I will 
continue to work very hard to pass this important tax relief 
legislation.

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