[Congressional Record Volume 155, Number 1 (Tuesday, January 6, 2009)]
[Senate]
[Page S138]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Mrs. Lincoln, and Mr. Bunning):
  S. 155. A bill to amend the Internal Revenue Code of 1986 to suspend 
the taxation of unemployment compensation for 2 years; to the Committee 
on Finance.
  Ms. SNOWE. Mr. President, I rise today to reintroduce a bill I 
offered last December that will provide much-needed relief to 
struggling families across America. The Unemployment Benefit Tax 
Suspension Act of 2009 is a critical piece of legislation, which should 
be considered as part of any stimulus package, that would suspend the 
collection of Federal income tax on unemployment benefits for 2008 and 
2009. This bill would ensure that as individuals sit down in the next 
couple months to complete their 2008 tax bills, they will not have to 
worry about paying taxes on the unemployment benefits they received 
last year or can get refunds of taxes withheld. It also means that the 
unemployed would not be concerned with taxes on benefits paid this 
year. I thank Senators Lincoln and Bunning for joining me to introduce 
this legislation.
  In light of the calamitous labor market, Congress must act to ensure 
that workers who lose their jobs do not also lose their livelihoods. In 
December, the Labor Department released sobering statistics that 
demonstrated the gravity of the situation we face. In November, the 
economy shed 533,000 jobs, the largest monthly job loss since December 
1974. Our unemployment rate now stands at a perilous 6.7 percent, a 15-
year high. We have lost 1.9 million jobs since the beginning of our 
present recession in December 2007--including two-thirds of those jobs 
in the last 3 months alone--and the number of unemployed stands at a 
whopping 10.3 million.
  Suspending the Federal income tax on unemployment benefits is a 
simple way to assist our Nation's unemployed workers and families. In 
fact, the CBO has estimated that in 2005, of the 8.1 million recipients 
of unemployment compensation benefits, 7.5 million had incomes of under 
$100,000. As such, most of the benefits of suspending this tax are 
likely to go to lower- and middle-income families, those struggling 
harder than ever just to make ends meet.
  During these challenging times, taxes on unemployment compensation 
represents a burden that unemployed members of our society simply 
cannot afford. Working families are already suffering, with the high 
cost of groceries, an unstable energy market, and the outrageous 
pricetag for health care. My bill offers a means to help stimulate the 
economy by making unemployed workers' benefits stretch farther. While 
it is certainly not a solution to the problem, it is a step in the 
right direction.
  President-elect Obama has voiced his support for this general idea, 
calling it ``a way of giving more relief to families,'' and I believe 
that is the ultimate goal we must pursue in these trying times. I look 
forward to seeing this bill is passed in a timely manner, so that the 
impact can be immediate.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 155

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Unemployment Benefit Tax 
     Suspension Act of 2009''.

     SEC. 2. SUSPENSION OF TAX ON UNEMPLOYMENT COMPENSATION.

       (a) In General.--Section 85 of the Internal Revenue Code of 
     1986 (relating to unemployment compensation) is amended by 
     adding at the end the following new subsection:
       ``(c) Temporary Suspension.--Subsection (a) shall not apply 
     to taxable years beginning after December 31, 2007, and 
     before January 1, 2010.''.
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