Senentor Leonard Boswell
In the last two years, my colleagues and I in Congress have worked hard to invest in and revitalize America's middle class as a pathway to rebuilding our entire nation's economy. In doing so, we have reduced the tax burden on the every-day Americans who are the backbone of our country's workforce and local economies.
According to USA Today, Americans paid their lowest level of taxes during 2009 since Harry Truman's presidency. Federal, state, and local taxes consumed 9.2 percent of all personal income in 2009 which is the lowest rate since 1950, according to the Bureau of Economic Analysis. This is due in large part to last year's Recovery Act in which one-third of the recovery spending went toward tax cuts like the Making Work Pay tax credit, which reduced income taxes for 95 percent of Americans.
In May, I introduced two important bills that will continue to cut taxes on middle-class Iowans the Universal College Credit Act and the Homeowner Tax Assistance Act.
The Universal College Credit Act, H.R. 5286, would help students and their families to pay for college tuition and other higher education expenses by providing a tax credit of up to $5,000 each year for four years of undergraduate studies and six years of graduate school. This legislation doubles the current credit cap on the American Opportunity Credit of $2,500, makes the increase permanent, and simplifies our tax code. As a country, we must continue to provide and enhance access to a quality education at all levels in order to remain competitive in our world community and provide for the highest quality of life for future generations.
The Homeowner Tax Assistance Act, H.R. 5239, would repeal the initial first-time homebuyer tax credit repayment provision on homes purchased between April 8, 2008 and January 1, 2009. Additionally, this legislation provides a temporary 25 percent mortgage interest allowance for homeowners who deduct their mortgage interest. This essentially allows homeowners to deduct 125 percent of their mortgage interest when they file their taxes, reducing their taxable income. H.R. 5239 extends much-needed assistance to existing homeowners by allowing them to keep more of their hard-earned money, while also helping to stem the tide of foreclosures that plague many communities.
As we begin to see signs that our economy is coming back, I remain committed to taking care of the middle class. In the coming months, I will support legislation that creates jobs and provides Iowa's families and workers with the tools and assistance they need to get back on their feet, and to contribute to the recovery of our nation's economy and their local communities.