“This tax is a travesty and does not reflect the debt we owe our veterans, particularly those who sacrificed their health in service for our country.  For years we’ve been working to end the Disabled Veterans Tax, and been stopped at every turn.  But this year the momentum is on our side.  Tomorrow is Veteran’s Day, and there is no greater tribute we can pay to their service than to provide the full benefits they have earned.  Today, I pledge to continue this fight on behalf of the 813 veterans in my district who have been short-changed through no fault of their own,” said Capps.

The disabled veterans tax is levied on military retirees who are entitled to both disability compensation for injuries sustained, and a pension for 20 years or more of service to their country.  An antiquated law passed in 1891 prevents “concurrent receipt” of both the disability pay from the Department of Veterans Affairs and the pension from the Department of Defense.   Therefore, for those veterans affected, their pension is reduced dollar for dollar by the amount of their disability pay.  In effect, this means the disability compensation is taxed at a rate of 100%.

Rep. Capps is a co-sponsor of legislation to change this unfair practice.  The Retired Pay Restoration Act (H.R. 303) is a bipartisan bill with 374 sponsors, more than enough support to pass the House.  However, the House Republican leadership will not allow this bill to come to the floor for a vote.  Instead, last week the House passed a proposal that would only cover those veterans who are more than 50 percent disabled and would phase-in those benefits over 10 years. This proposal would do absolutely nothing for two-thirds of disabled military retirees veterans.   For example, under the GOP proposal, a Vietnam veteran disabled by a below-the-knee amputation, not related to combat, would still be subject to the full amount of the disabled veterans tax.  The proposal did not go far enough, so Capps also voted for plan that incorporates the provisions of H.R. 303 because it would eliminate the Disabled Veterans Tax in 2004 for all affected veterans.

The report also found:

·        Nationwide, 560,000 disabled, retired veterans are subject to the tax.

·        In the 23^rd District of California, 813 disabled retired veterans lose $3.6 million per year in lost benefits.  This is an average of $4,365 per affected veteran in the district.

·        The legislation sponsored by Rep. Capps (H.R. 303) would immediately restore full benefits in 2004 to all affected disabled veterans, including the 813 living in the 23^rd district.  But the legislation passed by the House would phase-in restored benefits to only 15,501 veterans in California, and only 187 veterans in the 23^rd District, thus leaving behind 626 veterans on the Central Coast.  The phase-in for benefits under the Republican plan would take 10 years.

In an attempt to force action on the legislation earlier this summer, Rep. Jim Marshall (D-GA), a Vietnam veteran, introduced a discharge petition, which is a special House process that allows for a majority of the House, 218 Representatives, to force a vote on a bill that is being halted by the leadership.  203 Members of Congress joined Rep. Capps in signing the petition. Though the vast majority of House Republicans have sponsored this year’s bill to end the tax, only two have backed the effort to actually vote on it.

“In honor of Veterans Day and all the brave men and women currently putting their life on the line in Iraq, Afghanistan and around the world, we must renew our fight to end the Disabled Veterans Tax once and for all.  We have the support we need, we simply must convince the House Republican leadership to allow a fair vote on this bill.  The 53,200 California veterans penalized by this tax are counting on us, and we must not let them down,” said Capps.