[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[Extensions of Remarks]
[Page 5117]
[From the U.S. Government Publishing Office, www.gpo.gov]



          INTRODUCTION OF THE MILITARY TAX CREDIT ACT OF 2001

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                        HON. MICHAEL E. CAPUANO

                            of massachusetts

                    in the house of representatives

                        Thursday, March 29, 2001

  Mr. CAPUANO. Mr. Speaker, today, in honor of the thousands of men and 
women who proudly serve in our nation's armed forces, I take great 
pride in rising to formally introduce the Military Tax Credit Act of 
2001.
  Without question, our most valuable national security assets are the 
men and women who have voluntarily stepped forward to protect and 
defend our freedoms. Time and again, these individuals have risen to 
the challenge of protecting our national interests, and they have done 
so with a sense of honor and duty. Truly, the nation owes each and 
every person serving in our nation's armed forces a debt of gratitude 
for the sacrifices that they make every day.
  Yet, there is one particularly troublesome sacrifice that many in our 
armed services are forced to make. This sacrifice has less to do with 
national security and more to do with financial security. When it comes 
to providing our military personnel with an adequate system of pay we 
have, very simply, missed the mark. As a result, today we have a cadre 
of personnel, enlisted and officers, married and single, who are in a 
constant struggle to make their financial ends meet.
  Mr. Speaker, we've all heard the horror stories of military families 
forced on to public assistance and personnel that have had to seek 
part-time jobs to supplement their military pay. It seems incredible 
that over the past several years, as the cost of living has grown due 
to the expanding economy, we have been unable to provide a military pay 
structure that falls in line with this growth. I am well aware of 
numerous well-intentioned efforts in Congress to address the situation 
and I have supported many of these initiatives. The various pay 
increases enacted over the last several years have been a tremendous 
help. However, they clearly have not been enough and I believe that 
more can and must be done to improve the financial situation of our men 
and women in uniform.
  Since President Bush took office in January, one of the central 
tenets of his Administration has been to return some of the surplus 
back to the American people. While I may disagree with his plans to 
accomplish this goal, I do believe a portion of the surplus should be 
used to address certain issues like the military pay situation. The 
Military Tax Credit Act of 2001 would use funds from the budget surplus 
to provide a refundable tax credit to all active duty military 
personnel.
  Under this legislation, single personnel would be eligible for a 
$2800 refundable credit; while married personnel would receive a $4000 
refundable credit. In addition to those active duty personnel in the 
Army, Navy, Marines and Air Force, the credit would extend to active 
duty Coast Guard and National Guard personnel. Moreover, a portion of 
it would be made available to any reserve personnel serving thirty or 
more days on active duty.
  The beauty of this proposal is that even though every person; 
regardless of rank or grade would receive this credit, it would provide 
the biggest bang for the buck to those personnel that need it the most: 
the junior enlisted men and women and the junior officers. For single 
personnel at the E-6 level and below, the credit on average would be 
the equivalent of a 10.3 percent bonus. For married personnel in the 
same category the bonus would average 14.1 percent. The single junior 
officer would receive an average of 6.4 percent pay bonus while their 
married counterparts would average an 8.9 percent bonus.
  All of the money that military personnel receive as a result of this 
credit would be tax-free. In addition, since the funds used to pay for 
the tax credit would come from the surplus, it would not adversely 
affect the overall defense budget. In fact, it barely puts a dent in 
the surplus. The amount of surplus funds used to support this 
legislation represents only 3.1% of the total surplus available--a 
small price to pay for such a large benefit.
  Mr. Speaker, I am not a member of the Armed Services Committee, nor 
am I a member of the Defense Appropriations Subcommittee. And although 
the USS Constitution is homeported at the Charlestown Navy Yard, I have 
no major military installation in my district. Some might ask why then 
am I introducing tax credit legislation for military personnel. The 
answer is simple: because they deserve it. And while I don't believe 
that my legislation is the answer to all of the problems associated 
with the military's pay structure, I do believe that this is a great 
way to provide financial relief that is real and substantial. It is my 
hope that Congress agrees with me and will move to pass the Military 
Tax Credit of 2001.

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