Sandy area lawmakers seeking tax breaks for storm’s victims

A bipartisan coalition of lawmakers that includes Rep. John Larson, D-1st district, and lawmakers from New York and New Jersey have introduced a bill that would allow Hurricane Sandy victims to take new tax breaks when they file their income taxes next year.

The legislation would make it easier for Sandy victims to deduct uninsured losses and allow them to tap retirement accounts without any penalties.

“The damage caused by Hurricane Sandy will leave a lasting impact on communities in Connecticut and across the East Coast,” said Larson, who sits on the tax-writing Ways and Means Committee. “Congress has an obligation to help these Americans, who have been forced to deal with the economic strain of a devastating natural disaster.”

Modeled after a similar bill approved by Congress in the  wake of Hurricane Katrina, the bill would also allow businesses to expense disaster recovery costs and offer new tax credits for investing in disaster-hit areas or hiring displaced workers.

It would also provide cities and towns with a new bond allocation so they could raise money to rebuild docks and wharfs,  housing, water, and sewage facilities.

“While the Sandy aid we fought so hard for is finally getting to the communities that desperately need it, we know it’s not going to be enough to help families and businesses fully recover,” said Rep. Bill Pascrell, D-N.J.

But the legislation faces long odds. House Republicans leaders are wary considering any tax legislation until they can come up with a plan to overhaul the entire tax code.