Military tax relief bill stalled in Congress

Legislation which would provide tax breaks for military men and women remains stalled in Congress, even though President Bush last week declared an end to major combat in Iraq, the Associated Press reported.

Sen. John McCain, R-Ariz., plans to block the legislation in the Senate until tax writers give more military personnel a capital gains tax break when they sell their homes, said an aide told the AP.

Lawmakers agree that soldiers deployed away from home cannot easily meet residency requirements that give all homeowners a capital gains break when they sell their houses. McCain wants to loosen that requirement for military personnel who are deployed 50 miles or more from home. The bill currently covers personnel sent more than 150 miles away.

Slightly different versions of the legislation are awaiting approval in both the House and Senate, and each chamber blames the other for blocking the bill. Lawmakers have been debating it since the first days of the war. Democrats in the Senate want to see the House offer more generous military benefits and recoup the cost of the tax breaks from individuals who give up their U.S. citizenship to avoid paying taxes.