Congress Aids Military With Tax Cuts

After Congress approved President Bush’s $87.5 billion spending package to pay for the rebuilding of Iraq and Afghanistan, legislators took steps to take care of the people in uniform.

The Senate, enhancing the House’s bill passed unanimously last week, doubled to $12,000 the death gratuity paid to families of soldiers killed while on active duty and eliminated all taxes on the benefit.

"It's long overdue," Rep. Sam Johnson, R-TX, told the Associated Press. "It's been a long time since 9-11, and we are trying to take care of our military."

The bill also removed residency requirements for military members who sell their houses so they don’t have to pay capital gains taxes when they are deployed. In addition, childcare will no longer be viewed as a taxable benefit for sailors and soldiers.

To pay for the cuts, Congress extended customs fees, which is expected to offset the military benefits.

"We made modest improvements to help the families of the members of the military who have given the supreme sacrifice," Rep. Amo Houghton, R-N.Y., told the AP.

National Guard and Reserve troops were not forgotten in the new package. If they travel for training, they can use the new tax deduction for travel and lodging to offset their costs.

The bill took further steps to exempt the families of the Columbia space shuttle from income and estate taxes and it made it possible for the government to pull tax-exempt status from groups found to be terrorist organizations, the AP reported.

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