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A tax credit is a sum deducted from the total amount a taxpayer owes to the state. A tax credit may be granted for various types of taxes, such as an income tax, property tax, or VAT. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors. In some systems tax credits are 'refundable'^[1] to the extent they exceed the relevant tax. Tax systems may grant tax credits to businesses or individuals, and such grants vary by type of credit.

Credit for payments[link]

Many systems refer to taxes paid indirectly, such as taxes withheld by payers of income, as credits rather than prepayments. In such cases, the tax credit is invariably refundable. The most common forms of such amounts are payroll withholding of income tax or PAYE, withholding of tax at source on payments to nonresidents, and input credits for value added tax.

Some systems treat payments of certain taxes as refundable payments of other taxes in specific cases. An example is the U.S. credit for Federal highway use tax paid with respect to gasoline or diesel fuel for vehicle use off highways, which may be claimed as a payment of on federal income tax returns.

Individual income tax credits[link]

Income tax systems often grant a variety of credits to individuals. These typically include credits available to all taxpayers as well as tax credits unique to individuals. Some credits may be offered for a single year only.

Low income subsidies[link]

Several income tax systems provide income subsidies to lower income individuals by way of credit. These credits may be based on income, family status, work status, or other factors. Often such credits are refundable when total credits exceed tax liability.

United Kingdom[link]

In the United Kingdom, the 'child tax credit’ and ‘working tax credit’ are paid directly into the claimant's bank account or Post Office Card Account - in exceptional circumstances these can be paid by giro however payments may stop if account details are not provided ^[2]. A minimum level of child tax credits is payable to all individuals or couples with children, up to a certain income limit. The actual amount of child tax credits that a person may receive depends on these factors: the level of their income, the number of children they have, whether the children are receiving Disability Living Allowance and the education status of any children over 16. Working tax credit is paid to single low earners with or without children who are aged 25 or over and are working over 30 hours per week and also to couples without children, at least one of whom is over 25, provided that at least one of them is working for 30 hours a week. If the claimant has children however, they may claim working tax credit from age 16 upward - provided that they are working at least 16 hours per week. ^[3]

United States[link]

The U.S. system grants the following low income tax credits:

• Earned income credit: this refundable credit is granted for a percentage of income earned by a low income individual. The credit is calculated and capped based on the number of qualifying children, if any. This credit is indexed for inflation and phased out for incomes above a certain amount. For 2009, the maximum credit was $5,657.
• Credit for the elderly and disabled: A nonrefundable credit up to $1,125
• Retirement savings credit: a nonrefundable credit of up to 50% of contributions to IRAs or similar plans, phased out at incomes above $16,000 ($24,000 for head of household and $32,000 for joint returns).
• Mortgage interest credit: a nonrefundable credit that may be limited to $2,000, granted under specific mortgage programs.

Family relief[link]

Some systems grant tax credits for families with children. These credits may be on a per child basis or as a credit for child care expenses.

The U.S. system offers the following nonrefundable family related income tax credits (in addition to a tax deduction for each dependent child):

• child credit: a credit up to $1,000 per qualifying child.
• Child and dependent care credit: a credit up to $6,000, phased out at incomes above $15,000.
• Credit for adoption expenses: a credit up to $10,000, phased out at higher incomes.

Education, energy and other subsidies[link]

Some systems indirectly subsidize education and similar expenses through tax credits.

The U.S. system has the following nonrefundable credits:

• Two mutually exclusive credits for qualified tuition and related expenses. The American Opportunity Tax Credit is 100% of the first $2,000 and 25% of the next $4000 of qualified tuition expenses per year for up to two years. The Lifetime Learning Credit^[4] is 20% of the first $10,000 of cumulative expenses. These credits are phased out at incomes above $50,000 ($100,000 for joint returns) in 2009. Expenses for which a credit is claimed are not eligible for tax deduction.
• First time homebuyers credit up to $7,500.
• Credits for purchase of certain nonbusiness energy property and residential energy efficiency. Several credits apply with differing rules.^[5]

Business tax credits[link]

Many systems offer various incentives for businesses to make investments in property or operate in particular areas. Credits may be offered against income or property taxes, and are generally nonrefundable to the extent they exceed taxes otherwise due. The credits may be offered to individuals as well as entities. The nature of the credits available varies highly by jurisdiction.

United States[link]

This unreferenced section requires citations to ensure verifiability.

U.S. income tax has numerous nonrefundable business credits. In most cases, any amount of these credits in excess of current year tax may be carried forward to offset future taxes, with limitations. The credits include the following, available to individuals and businesses:

• Alternative motor vehicle credit: several credits are available for purchase of varying types of non-gasoline powered vehicles.^[6]
• Alternative fuel credits: a credit based on the amount of production of certain non-petroleum fuels.^[7]
• Disaster relief credits^[8]
• Credits for employing individuals in certain areas or those formerly on welfare or in targeted groups
• Credit for increasing research expenses
• A variety of industry specific credits

Many sub-Federal jurisdictions (states, counties, cities, etc.) within the U.S. offer income or property tax credits for particular activities or expenditures. Examples include credits similar to the Federal research and employment credits, property tax credits granted by cities (often called abatements) for building facilities within the city, etc. These items often are negotiated between a business and a governmental body, and specific to a particular business and property.

Federal nonrefundable investment tax credits[link]

Tax credits, while they come in many forms, are authorized incentives under the Internal Revenue Code (and some state tax codes) to implement public policy. Congress, in an effort to encourage the private sector to provide a public benefit, allows a participating taxpayer a dollar for dollar reduction of their tax liability for investments in projects that probably would not occur but for the credits.

Federal Historic Rehabilitation Tax Credit[link]

The legislative incentive program to encourage the preservation of “historical buildings”. Congress instituted a two-tier Tax Credit incentive under the 1986 Tax Reform Act. A 20% credit is available for the rehabilitation of historical buildings and a 10% credit is available for non-historic buildings, which were first placed in service before 1936. Benefits are derived from tax credits in the year the property is placed in service, cash flow over 6 years and repurchase options in year six.^[9]

Renewable Energy/Investment Tax Credit (ITC)[link]

This investment tax credit varies depending on the type of renewable energy project; solar, fuel cells ($1500/0.5 kW) and small wind (< 100 kW) are eligible for credit of 30% of the cost of development, with no maximum credit limit; there is a 10% credit for geothermal, microturbines (< 2 MW) and combined heat and power plants (< 50 MW). The ITC is generated at the time the qualifying facility is placed in service. Benefits are derived from the ITC, accelerated depreciation, and cash flow over a 6-8 year period.

Renewable Energy/Production Tax Credit (PTC)[link]

Under present law, an income tax credit of 2.2 cents/kilowatt-hour is allowed for the production of electricity from utility-scale wind turbines, geothermal, solar, hydropower, biomass and marine and hydrokinetic renewable energy plants. This incentive, the renewable energy Production Tax Credit (PTC), was created under the Energy Policy Act of 1992 (at the value of 1.5 cents/kilowatt-hour, which has since been adjusted annually for inflation).^[10]

Low Income (Affordable) Housing Tax Credit (LIHTC)[link]

Under this program, created in the 1986 Tax Reform Act, the U.S. Treasury Department allocates tax credits to each state based on that states population. These credits are then awarded to developers who, together with an equity partner, develop and maintain apartments as affordable units. Benefits are derived primarily from the tax credits over a 10 year period.

Qualified School Construction Bond (QSCB)[link]

QSCBs are U.S. debt instruments used to help schools borrow at nominal rates for the rehabilitation, repair and equipping of their facilities, as well as the purchase of land upon which a public school will be built. A QSCB holder receives a Federal tax credit in lieu of an interest payment. The tax credits may be stripped from QSCB bonds and sold separately. QSCBs were created by Section 1521 of the American Recovery and Reinvestment Act of 2009. Internal Revenue Code Section 54F also addresses QSCBs.

Work Opportunity Tax Credit (WOTC)[link]

The Work Opportunity Tax Credit (WOTC) is a federal tax credit providing incentives to employers for hiring groups facing high rates of unemployment, such as veterans, youths and others. WOTC helps these targeted groups obtain employment so they are able to gain the skills and experience necessary to obtain better future job opportunities. The WOTC is based on the number of hours an employee works and benefits the employer directly. Foss and Company has been successful in developing a structure whereby passive third-party investors may take the tax credit benefit.

State tax credits[link]

Approximately 43 states provide a variety of special incentive programs that utilize state tax credits. These include Brownfield credits, Film Production credits, Renewable energy credits, Historic Preservation credits and others. The amount of credit, the term of credit and the cost of the credit differs from state to state. These credits can be either in the form of a certificate, which can be purchased as an asset, or in a more traditional pass through entity. The tax credits can generally be used against insurance company premium tax, bank tax and income tax.

Value added tax[link]

Resellers or producers of goods or providers of services (collectively, providers) must collect value added tax (VAT) in some jurisdictions upon billing or being paid by customers. Where these providers use goods or services provided by others, they may have paid VAT to other providers. Most VAT systems allow the amount of such VAT paid or considered paid to be used to offset VAT payments due, generally referred to as an input credit. Some systems allow the excess of input credits over VAT obligations to be refunded after a period of time.

Foreign tax credit[link]

Income tax systems that impose tax on residents on their worldwide income tend to grant a foreign tax credit for foreign income taxes paid on the same income. The credit often is limited based on the amount of foreign income. The credit may be granted under domestic law and/or tax treaty. The credit is generally granted to individuals and entities, and is generally nonrefundable. See Foreign tax credit for more comprehensive information on this complex subject.

Credits for alternative tax bases[link]

Several tax systems impose a regular income tax and, where higher, an alternative tax. The U.S. imposes an alternative minimum tax based on an alternative measure of taxable income. Mexico imposes an IETU based on an alternative measure of taxable income. Italy imposes an alternative tax based on assets. In each case, where the alternative tax is higher than the regular tax, a credit is allowed against future regular tax for the excess. The credit is usually limited in a manner that prevents circularity in the calculation.

References[link]

External links[link]

• Federal Tax Credits for Rehabilitating Historic Buildings:
• http://www.nps.gov/history/hps/tps/tax/index.htm
• Rehabilitation Tax Credit http://www.irs.gov/businesses/small/industries/article/0,,id=97599,00.html
• Affordable Housing Tax Credit
• http://www.hud.gov/offices/cpd/affordablehousing/training/web/lihtc/basics/
• Work Opportunity Tax Credit
• http://www.doleta.gov/business/incentives/opptax/
• Database of State Incentives for Renewables and Efficiency
• http://www.dsireusa.org/
• Department of Energy. Business Tax Incentives.
• http://www.energy.gov/business_tax_incentives.htm
• http://www.cpag.org.uk/cro/tax_credits.htm

Johnny Isakson
United States Senator from Georgia
Incumbent
Assumed office January 3, 2005 Serving with Saxby Chambliss
Preceded by	Zell Miller
Member of the U.S. House of Representatives from Georgia's 6th district
In office February 23, 1999 – January 3, 2005
Preceded by	Newt Gingrich
Succeeded by	Tom Price
Member of the Georgia Senate from the district
In office 1993–1997
Member of the Georgia House of Representatives from the 21st district
In office January 3, 1977 – January 3, 1991
Succeeded by	James Mills
Personal details
Born	John Hardy Isakson (1944-12-28) December 28, 1944 (age 67) Atlanta, Georgia
Nationality	American
Political party	Republican
Spouse(s)	Dianne Davison
Children	John Isakson Kevin Isakson Julie Isakson
Residence	Marietta, Georgia
Alma mater	University of Georgia (B.B.A.)
Occupation	Real Estate Executive
Religion	Methodist
Website	www.isakson.senate.gov
Military service
Service/branch	Air National Guard
Years of service	1966–1972
Unit	Georgia

John Hardy "Johnny" Isakson (born December 28, 1944) is the junior United States Senator from Georgia and a member of the Republican Party. Previously, he represented Georgia's 6th Congressional district in the House.

Born in Atlanta, Georgia, Isakson served in the Georgia Air National Guard (1966–1972) and graduated from the University of Georgia. He opened a real estate branch for Northside Realty and later served 22 years as the company's president. After a failed bid for the Georgia House of Representatives in 1974, he was elected in 1976. He served five terms, including two as minority leader. Isakson was the Republican candidate for governor of Georgia in 1990, but lost. Two years later, he was elected to the Georgia Senate and served one term. He unsuccessfully ran in the Republican primary in the 1996 U.S. Senate elections.

After 6th District Congressman and Speaker of the House Newt Gingrich resigned, Isakson ran in the February 1999 special election to succeed him, winning by a 40-point margin. He ran for the U.S. Senate in November 2004 after conservative Democratic incumbent Zell Miller opted not to run for re-election. With the backing of much of Georgia's Republican establishment, he won both the primary and general elections by large margins. He is serving his second term after re-election to the Senate in 2010.

Early life, education, and real estate career[link]

Isakson was born in Atlanta, Georgia, the son of Julia (née Baker) and Edwin Andrew Isakson, a Greyhound bus driver.^[1] His paternal grandparents were of Swedish descent, and his paternal grandfather was born in Östersund. His mother is of mostly British ancestry which has been in the American South since the colonial era.^[2][3] He currently lives in the nearby suburb of Marietta. He served in the Georgia Air National Guard from 1966 to 1972, leaving service as a staff sergeant.^[4] Shortly after graduating from the University of Georgia, he opened the first Cobb County office of Northside Realty, a prominent Atlanta-area real estate firm. He became company president in 1979, a post he held for 22 years, during which Northside became the biggest independent real estate company in Georgia.

Early political career (1974-1998)[link]

He said that like his earliest days in real estate, the first few years in politics was an "absolute failure." In 1972, he ran for a seat on the Cobb County Commission and lost because it was a solidly Democratic area.^[5]

Georgia House of Representatives[link]

In 1974, Isakson first ran for the Georgia House of Representatives in an eastern Cobb County district and lost. He ran again in 1976 and won. He served seven terms in the House. He won re-election unopposed in 1984^[6] and 1988^[7]. In the last two terms (1983-1990) he was the Republican Minority leader. In 1988, he was Co-Chair for U.S. Senator Bob Dole's presidential primary campaign.

1990 gubernatorial election[link]

He was the Republican candidate for Governor of Georgia in 1990. He won the Republican primary with 74% of the vote in a four candidate field.^[8] In the general election, he was defeated by Democratic Lieutenant Governor Zell Miller 53%-45%.^[9] Miller's campaign was managed by James Carville. Miller ran on a pledge to start a state lottery and use the revenue for public schools. Isakson proposed a ballot referendum on the lottery.

Georgia Senate[link]

In 1992, he was elected to the Georgia Senate. He ran on criticism of Republican President George H.W. Bush saying that it was a "Reagan Democratic recession."^[10] In 1996, he decided not to run for re-election to a second term and instead run for the United States Senate.

1996 U.S. Senate election[link]

In 1996, he ran in the Republican primary for the U.S. Senate seat being vacated by retiring Democrat U.S. Senator Sam Nunn. However when Isakson announced his candidacy, he declared that he was the abortion rights Republican candidate, a calculated risk since most Georgia Republicans are anti-abortion. He ran a television ad announcing his support for abortion rights. Isakson finished second in the primary election with 35% of the vote, but the winner Guy Millner, a millionaire businessman, failed to get a majority of the vote getting 42%.^[11] Therefore, per Georgia law he was forced into a primary runoff election. During this time, the 1996 Summer Olympic Games opened in Atlanta. He said he was as "busy as a badminton player against China." Millner defeated Isakson 53%-47%.^[12] Millner lost to Democrat Max Cleland.

U.S. House of Representatives (1999-2005)[link]

Elections[link]

1999

In November 1998, 6th District U.S. Congressman and Speaker of the House Newt Gingrich faced a revolt in his caucus after the Republicans lost five seats in the midterm elections. Amid the ruckus, Gingrich announced on Friday after the Tuesday elections not only that he would not run for a third term as Speaker, but he would also not take his seat for an eleventh term beginning in January 1999. Isakson ran for the seat in a special election in February. He raised $1 million and and put in $500,000 of his own wealth and spent far more than any of his five challengers. He won the election with 65% of the vote, up forty points ahead of the second place finisher Christina Fawcett Jeffrey.^[13]

2000

He won re-election to his first full term with 75% of the vote.^[14]

2002

He won re-election to his second full term with 80% of the vote.^[15]

Committee assignments[link]

He was a member of the U.S. House Education Committee,^[16] when U.S. Congressman John Boehner was Chairman and when they passed the No Child Left Behind Act.^[17]

U.S. Senate (2005-Present)[link]

Elections[link]

2004

In early 2003, conservative Democratic U.S. Senator Zell Miller—who had been appointed to fill out the term of the late Republican Senator Paul Coverdell and elected to the post in his own right in 2000—declared his intention not to run for a full term in the Senate in 2004. Isakson immediately entered the race. He quickly picked up the endorsements of much of the Republican establishment in Georgia, as well as that of President George W. Bush. He also picked up support of social conservatives including the Georgia Christian Coalition, in part due to his rightward turn on social issues since 1990 (see below). Miller also endorsed Isakson and campaigned for him. He faced 8th District U.S. Congressman Mac Collins and businessman Herman Cain in the primary.

It was initially thought Isakson would face a difficult primary since many socially conservative Republicans still felt chagrin at Isakson's declared support for abortion rights in 1990. However, he won the Republican primary with 53%, with Cain a distant second and Collins third. In the general election, he easily defeated the Democratic candidate, 4th District Congresswoman Denise Majette, by 18 points. Isakson's election marked the first time in Georgia's history that both of the state's U.S. Senate seats had been held by Republicans, as Saxby Chambliss had won the other seat by defeating Nunn's successor, Max Cleland, two years earlier.

2010

In 2010, he was unopposed in the primary. Isakson won re-election with 58% of the vote in 2010, defeating State Commissioner of Labor Mike Thurmond.

Tenure[link]

Since his election to the House, Isakson shifted to the right on social issues. He now identifies as pro-life, anti-gay marriage and pro-gun rights. On the Issues, a nonpartisan Web site that rates candidates, labels Isakson "a libertarian-leaning conservative."^[18] When he ran in the 6th District in 1999, Isakson largely ignored the issue of abortion; however, in 2003–2004, in his campaign for the Senate, he took the same position as President Bush, saying we needed to "create a culture of life" in America.^[19]

Isakson has been given an "A" rating by the National Rifle Association, the "Hero of the Taxpayer" award by Citizens Against Government Waste, and a "92" rating on a scale of 100 by the Christian Coalition of America (incidentally, the same score Mac Collins received). He also received a "100" rating from the American Conservative Union. National Journal recently rated him the 7th most conservative Senator in the Senate. In the Senate, Isakson is currently working to oppose the Castle-DeGette Stem Cell Bill by offering an alternative that does not allow for the destruction of a human embryo. This alternative legislation recently garnered a veto-proof 70-vote majority.

President George W. Bush and Senator Johnny Isakson aboard Air Force One.

Isakson favors tougher border security to address the immigration issue.^[20] He is credited for developing the "Isakson Principle," which denies the legalization of status to any illegal immigrant or the creation of a temporary worker program unless the Secretary of Homeland Security certifies ("triggers") to the president and Congress that measurable border security provisions are in place.^[21] However, Isakson was criticized by advocates of immigration reduction for working on the Comprehensive Immigration Reform Act of 2007, which was criticized by some as an amnesty.^[22]

Contrary to his critics' assertions, Isakson played a role only in drafting the border security sections of the bill (the previously mentioned "Isakson Principle") and stated from the beginning that he was withholding his support for the bill until the final product was produced.^[22] His vote of "Nay" on the final motion to end debate amounted to a vote to kill the bill.^[23] He and Senator Chambliss also called on President Bush to send an emergency supplemental border security spending bill to the Congress.^[24]

Committee assignments[link]

• Committee on Commerce, Science and Transportation
  • Subcommittee on Aviation Operations, Safety, and Security
  • Subcommittee on Communications, Technology, and the Internet
  • Subcommittee on Consumer Protection, Product Safety, and Insurance
  • Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard
  • Subcommittee on Science and Space
  • Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security
• Committee on Health, Education, Labor, and Pensions
  • Subcommittee on Employment and Workplace Safety (Ranking Member)
  • Subcommittee on Primary Health and Aging
• Committee on Foreign Relations
  • Subcommittee on Near Eastern and South and Central Asian Affairs
  • Subcommittee on African Affairs (Ranking Member)
  • Subcommittee on East Asian and Pacific Affairs
• Committee on Small Business and Entrepreneurship
• Committee on Veterans' Affairs
• Select Committee on Ethics (Vice Chairman)

Personal life[link]

Isakson and his wife Dianne have three children: John, Kevin, and Julie.

Electoral history[link]

See also[link]

Conservatism portal

References[link]

External links[link]

• United States Senator Johnny Isakson official Senate site
• Isakson for Senator official campaign site
• Biography at WhoRunsGov.com at The Washington Post
• Biography at the Biographical Directory of the United States Congress
• Voting record maintained by The Washington Post
• Biography, voting record, and interest group ratings at Project Vote Smart
• Congressional profile at GovTrack
• Congressional profile at OpenCongress
• Issue positions and quotes at On the Issues
• Financial information at OpenSecrets.org
• Staff salaries, trips and personal finance at LegiStorm.com
• Campaign finance reports and data at the Federal Election Commission
• Appearances on C-SPAN programs
• Collected news and commentary at The New York Times
• Profile at SourceWatch
• Profile at OurCampaigns.com

v t e United States Senators from Georgia Class 2 Few Jackson Walton Tattnall Baldwin Jones Crawford Bulloch Bibb Troup Forsyth Walker Ware Cobb Prince Troup King Lumpkin Berrien Charlton Toombs H. Miller Norwood B. Hill Barrow A. Colquitt Walsh Bacon West Hardwick Harris Cohen Russell Gambrell Nunn Cleland Chambliss Class 3 Gunn Jackson Milledge Tait Elliott Berrien Forsyth Cuthbert W. Colquitt Johnson Dawson Iverson J. Hill Gordon Brown Gordon Clay Terrell Smith Watson Felton George Talmadge Mattingly Fowler Coverdell Z. Miller Isakson