[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[House]
[Page 778]
[From the U.S. Government Publishing Office, www.gpo.gov]




      ELIMINATING INCOME TAX ON UNEMPLOYMENT COMPENSATION BENEFITS

  The SPEAKER pro tempore (Mr. LaTourette). Under a previous order of 
the House, the gentleman from Pennsylvania (Mr. Gekas) is recognized 
for 5 minutes.
  Mr. GEKAS. Mr. Speaker, yesterday, I introduced a piece of 
legislation that would have the result of eliminating income taxes on 
unemployment compensation benefits. Since 1986 that had been a part of 
the tax structure of our country, that even those who have lost their 
jobs and have received and started to receive unemployment compensation 
benefits would have had to include those benefits in their gross income 
for tax purposes.
  My bill would eliminate that from now on. Actually the bill would 
call for elimination of tax on unemployment benefits starting 
retroactively to January of 2001 so that the entire tax year of 2001 
would be one in which there would be no income tax applicable to 
unemployment compensation benefits. This has the happy circumstance and 
coincidence of also covering all the people who lost their jobs after 
September 11, and we know what happened to the economy as a result of 
that terror jolt that happened across the world.
  So here we have a prospect of eliminating a vexatious tax, and it has 
some admirable consequences. Number one, it fits in perfectly with 
President Bush's first announced support of extending unemployment 
compensation, which is going to occur, we are sure.
  Secondly, it comports with his desire to cut taxes as an economic 
stimulus tool. So here we have perhaps just a modest number of dollars 
that will remain in the pockets of our unemployed; but that in itself, 
that modest amount, can act as additional wherewithal for an unemployed 
person to use for his family, so that the tax cut that is employed also 
acts as an economic stimulus. So we have the best of all worlds.
  The bill standing by itself, I aim to make a subject of a ``Dear 
Colleague'' to entertain as many cosponsors as possible; but I have a 
larger scenario in mind. The other body has passed, we believe, an 
unemployment compensation extension of 13 weeks to the current system 
of unemployment comp. When that reaches the House, I aim to add or try 
to add my bill as an amendment to the extension of unemployment 
benefits and thus be able to complete the entire issue in one fell 
swoop.
  This unemployment compensation benefit tax cut, as I want to call it, 
should meet with approval from every sector of our economy and from our 
employer base and from our IRS operatives as well. This will be one way 
that some of the paperwork in which they are engaged can be eliminated 
and proper credit be given to unemployment compensation benefits.
  One other note, Mr. Speaker. If this should not pass and become law 
before April 15, it means that the tax returns filed for the year 2001 
would not be able to include credit for the taxes paid by unemployed 
people on their benefits. We have the pure understanding that if it 
passes after April 15 the individuals who can benefit from this could 
file an amended return; and thus we are sure that whatever reduction in 
their tax would be applicable for the year 2001 would be garnered by 
them whether it is passed before April 15 or after April 15.
  I invite my colleagues on both sides of the House to join with me in 
this effort to rid the unemployed from a vexatious and unfair tax. It 
is simply unfair and wrong to continue the practice of taxing 
unemployment compensation benefits.

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