Ways and Means Takes Up Sherman Tax Bill

Washington, D.C. - The House Ways and Means Committee on Wednesday considered legislation by Congressman Brad Sherman to offer tax relief to individuals who donated to relief groups helping victims of Hurricanes Katrina and Rita.

œI believe this is the least we can do as a country to show our appreciation to the unselfish outpouring of support for the victims of these two major natural disasters and to encourage additional contributions from ordinary Americans, Sherman said in presenting the legislation to the panel that writes tax laws.

Under Shermans proposal, individuals who do not itemize deductions " generally those who file 1040A and 1040EZ returns " could nevertheless deduct from their taxable income the amount they donated to charities or churches helping victims of the devastating hurricanes.

A middle-class renter who responded to the tragedy by giving $25 to the Red Cross, for example, could add that amount to the standard deduction and subtract the total from the taxpayers taxable income for this year and in 2006.

The Red Cross has received approximately $1.52 billion this year for hurricane relief efforts. The average donation was about $100.

œThis is a small, reasonable initiative that I am sure will have great meaning to our fellow citizens who are assisting the people of the Gulf region who continue to suffer from the double tragedies of Hurricane Katrina and Hurricane Rita, Sherman said.

The special tax deduction would have a minimal impact on the federal budget. It is designed to encourage donations next year, but would expire after 2006.