Dems Ready To Break Obama’s Middle Class Tax Pledge, And They’re Starting By Not Extending Bush Tax Cuts
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BUSH TAX CUTS PASSED WITH BIPARTISAN SUPPORT IN 2001, 2003 In 2001, 28 House Democrats Joined House Republicans In Lowering Tax Rates On Income, Dividends, Capital Gains.(H.R. 1836, Economic Growth And Tax Relief Reconciliation Act Of 2001, Roll Call Vote #149, Approved 240-154, R: 211-0, D: 28-153, I: 1-1, 5/26/01)
- And 12 Senate Democrats Joined 46 Senate Republicans In Supporting The Legislation.(H.R. 1836, Economic Growth And Tax Relief Reconciliation Act Of 2001, Roll Call Vote #170, Approved 58-33, R: 46-2, D: 12-33, 5/26/01)
In 2003, 7 House Democrats Joined House Republicans To Further Reduce Taxes On Income, Dividends, Capital Gains.(H.R. 2, Jobs And Growth Tax Relief Reconciliation Act Of 2003, Roll Call Vote #225, Approved 231-200, R: 224-1, D: 7-198, I: 0-1, 5/23/03)
- And 2 Senate Democrats Joined 48 Senate Republicans In Supporting The Legislation. (H.R. 2, Jobs And Growth Tax Relief Reconciliation Act Of 2003, Roll Call Vote #196, Approved 50-50, Vice President Voted Yea, R: 48-2, D: 2-47, I: 0-1, 5/23/03)
BUT NOW HOUSE MAJORITY LEADER HOYER IS AGAINST MAKING THEM PERMANENT, BREAKING OBAMA’S PLEDGE NOT TO RAISE TAXES ON THE MIDDLE CLASS Candidate Obama: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” (Senator Barack Obama, Remarks In Dover, NH, 8/12/08)
- President Obama: “If Your Family Earns Less Than $250,000 A Year, A Quarter Million Dollars A Year, You Will Not See Your Taxes Increased A Single Dime. I Repeat: Not One Single Dime.” (President Barack Obama, Address Before A Joint Session Of Congress, Washington, DC, 2/24/09)
Hoyer Says The Bush Tax Cuts For The Middle Class Should Not Be Permanent. “Hoyer, the second-ranking House Democrat, said in an interview that he expects Congress to extend middle-class tax cuts enacted during the Bush administration that are set to expire at the end of this year. But he said the extension should not be permanent.” (Lori Montgomery, “Rep. Steny Hoyer Says Middle-Class Tax Breaks May Not Be Affordable Long-Term,” The Washington Post, 6/22/10) Hoyer Is Laying The Groundwork To Break Obama’s Pledge Not To Increase Taxes On The Middle Class. “Tax cuts that benefit the middle class should not be ‘totally sacrosanct’ as policymakers try to plug the nation’s yawning budget gap, House Majority Leader Steny Hoyer (D-Md.) said Monday, acknowledging that it would be difficult to reduce long-term deficits without breaking President Obama’s pledge to protect families earning less than $250,000 a year.” (Lori Montgomery, “Rep. Steny Hoyer Says Middle-Class Tax Breaks May Not Be Affordable Long-Term,” The Washington Post, 6/22/10) And Other Democrats On Capitol Hill Do Not Feel Bound By President Obama’s Pledge Not To Raise Taxes On Those Making Less Than $250,000 A Year. “Democrats are looking at the possibility of raising taxes on families below the $250,000-a-year threshold promised by President Barack Obama during the election. The majority party on Capitol Hill does not feel bound by that pledge, saying the threshold for tax hikes will depend on several factors, such as the revenue differences between setting the threshold at $200,000 and setting it at $250,000.” (Alex Bolton, “Dems: We’re Not Bou nd By President’s Tax Vow,” The Hill, 6/22/10)
- Sen. Diane Feinstein (D-CA) Says That “You Can’t Make Promises To People.” “‘You could go lower, too — why not $200,000?’ said Sen. Dianne Feinstein (D-Calif.). ‘With the debt and deficit we have, you can’t make promises to people. This is a very serious situation.’” (Alex Bolton, “Dems: We’re Not Bound By President’s Tax Vow,” The Hill, 6/22/10)
- Sen. Tom Harkin (D-IA): “I’m Not Hard And Fast On $250,000. . . Quite Frankly, It Could Be Somewhat Lower Than That.”(Alex Bolton, “Dems: We’re Not Bound By President’s Tax Vow,” The Hill, 6/22/10)
- Sen. Byron Dorgan (D-ND): “I Don’t Think There’s Any Magic In The Number, Whether It’s $250,000, $200,000 Or $225,000.”(Alex Bolton, “Dems: We’re Not Bound By President’s Tax Vow,” The Hill, 6/22/10)
NOT EXTENDING BUSH TAX CUTS HITS MIDDLE CLASS INDIVIDUALS WITH HIGHER TAXESAND HAMPERS SMALL BUSINESS JOB GROWTH If The Bush Tax Cuts Are Allowed To Expire The Average Tax Filer Will See Their Taxes Rise $1,368. (Tax Policy Center, “Make Individual Income Tax Cuts In EGTRRA (2001) And JGTRRA (2003) Permanent,” Table T10-0070, 2/3/10) If The Bush Tax Cuts Are Allowed To Expire, A Family Of Four With Two Children And One Breadwinner And $50,000 In Yearly Income Would See Their Federal Taxes Increase $2,137 From $688 To $2,825. (Mark Robyn, “Taxpayers Face Uncertainty In 2011 As Bush And Obama Tax Cuts Expire,” The Tax Foundation, 5/26/10)
- A Family Of Five, With Two Working Parents And Three Children With A Yearly Income Of $45,000 Would See Their Effective Tax Rate Increase From -3.5% to 2.3%. They Would Go From Receiving A Credit Of $1,510 To Owing $1,020. (Mark Robyn, “Taxpayers Face Uncertainty In 2011 As Bush And Obama Tax Cuts Expire,” The Tax Foundation, 5/26/10)
- A Single Parent With A Yearly Income Of $25,000 Currently Has No Income Tax Liability And An Effective Tax Rate Of -7.5%. If The Bush Tax Cuts Expire Their Rate Would Increase To -3.5%, Reducing Assistance From $1,881 To $928. (Mark Robyn, “Taxpayers Face Uncertainty In 2011 As Bush And Obama Tax Cuts Expire,” The Tax Foundation, 5/26/10)
Obama’s Income Tax Rate Increase Will Hit Small Businesses That Create 60 To 80 Percent Of New Jobs, “Discouraging” Their “Growth Or Expansion.” “They want to restore the higher, Clinton-era tax rates on the top two individual income brackets, increasing the 33 and 35 percent rates to 36 and 39.6 percent. But these higher rates won’t just hit high wages; they’ll hit business income … Depending on how we define ’small business,’ these higher tax rates would raise taxes on 45 to 55 percent of small business income … So why should we pay attention to the way our tax code treats small businesses? They are an important source of innovation and risk-taking, creating betwee n 60 and 80 percent of net new jobs, employing over half the labor force … Higher income tax rates reduce the investment spending of entrepreneurs and the likelihood that they invest at all, discouraging the growth or expansion of small businesses.” (Robert Carroll, “Small Business And The Personal Income Tax Rates,” Tax Foundation, 10/28/08) Obama’s Higher Income Tax Rates Will Stifle Entrepreneurship And Hurt “An Important Source Of innovation.” “The impact of the higher tax rates on the entrepreneurial sector is also particularly troubling. An often underappreciated feature of our tax system is that roughly one-third of all business taxes are paid by owners of flow-through businesses … when they file their individual tax returns. These businesses are an important source of innovation and risk taking.” (Robert Carroll, “The Economic Cost Of High Tax Rates,” Tax Foundation, 7/29/09) NEXT UP: THE DEATH TAX REAPPEARS, HITTING FAMILY OWNED BUSINESSES Senator Sanders Pushing Excessive New Death Tax. “Vermont independent Sen. Bernie Sanders and three Senate Democrats Thursday proposed an estate-tax plan that would hit wealthier taxpayers harder than another proposal on the table. … Under the proposal, as in 2009, the exemption would be $3.5 million for an individual, or as much as $7 million for a couple, with a tax rate of 45%. But estates with taxable assets between $10 million and $50 million would pay a 50% rate, and estates valued above $50 million would pay 55%. A further 10 % surtax would apply to assets above $500 million.” (Laura Saunders, “Sanders Estate-Tax Proposal Would Hit Wealthy Harder,” The Wall Street Journal, 6/25/10)
- “‘The Sanders Proposal Is One Extreme In The Current Debate,’ Said Clint Stretch, An Analyst At Deloitte Tax. ‘The Challenge For The Senate Is Whether The Members Can Agree To Anything At All.’” (Laura Saunders, “Sanders Estate-Tax Proposal Would Hit Wealthy Harder,” The Wall Street Journal, 6/25/10)
Even If Sanders Proposal Is Not Adopted, Death Tax Will Come Back With A Vengeance Next Year. “The estate tax lapsed temporarily on Jan. 1 after the Senate failed to extend it last year. If lawmakers do nothing, the tax will resume in 2011 with a 55% rate on estates above about $1.2 million. Last year, estates of more than $3.5 million for an individual were subject to a 45% tax.” (Laura Saunders, “Sanders Estate-Tax Proposal Would Hit Wealthy Harder,” The Wall Street Journal, 6/25/10) And Death Tax Goes After Family-Owned Businesses And Workers “Particularly Hard.” “Despite the common misconception that the death tax impacts only wealthy estates, economists now generally agree that it is actually a tax on capital because of its impact on businesses and workers. Capital–whether it is cash, equipment, or other types of property–is necessary for businesses to create new jobs and pay higher wages. There is a general consensus among economists that taxing capital is harmful to the economy. Yet because it is a tax on capital, the estate tax hits America’s family-owned businesses and their workers particularly hard.” (Curtis Dubay, “Estate Tax A Killer For Family-Owned Businesses And Their Workers,” The Heritage Foundation, 11/19/09)
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Posted: June 29th, 2010 under Action Alert, Democrats, From the Right, In Focus, In the States.
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