Keeping Our Tax Cut Permanent
Making the recently-passed tax cut permanent means more than just extra money in the pocket of every tax-paying, hardworking American. It is a tool in which to ensure long term economic security and prosperity for our nation.
You will remember that last year, I supported President Bush and my House colleagues in reducing the tax burden on working American families. Under last year’s bill, this Congress acted on a comprehensive $1.35 trillion tax relief package that reduces the death tax, provides marriage penalty relief, and cuts tax rates across the board.
Last year’s tax cut provided immediate refunds to more than 1.2 million Alabamians alone. The Internal Revenue Service estimates the value of refunds to Alabama taxpayers was more than half a billion dollars. This is money hard-working families can spend on things they need. Money families have worked for, and should be able to decide on how to spend themselves.
Our work to “lock-up” Social Security and Medicare funds in advance of the tax cut enabled us to make an across the board tax rate cut for over-burdened tax payers while maintaining the government programs on which we all rely.
A procedural rule last year in the U.S. Senate, however, means this new tax structure will end in 2010. This “sunset” policy, as it is known, prohibits approving a tax reduction that extends beyond the next ten years. It is not good policy. However, we have the opportunity to remedy this situation.
I supported and co-sponsored (H.R. 2316) which makes permanent the tax benefits enacted under last year’s tax cut legislation. This is currently awaiting consideration in the Senate.
This is an issue of tremendous importance to all. If Congress does not act to make last year’s tax cut permanent, the result will be an increase in taxes in 2011. In fact, if this happens, this would be the largest tax increase in U.S. history - a whopping $354 billion in the two years beginning in 2011. Many important elements of last year’s tax cut would be reversed, among them: the increase in the child tax credit; the elimination of the death tax; the increases in the limits of contributions to both standard IRAs and contributions to education IRAs. Not to mention the increase in the adoption tax credit and the elimination of the marriage penalty.
These are all issues important to many of us. Again, if Congress does not act now, these benefits will be reversed. Many of you were pleased when the tax cut was made last year, and just as happy to receive the early refund checks a few months later.
Working families that gather around their kitchen tables to do their financial planning do not need to be told that they can not pay off their mortgage early, or send a child to college because of strange budget rules in the Senate.
We were right in approving the tax cut last year, and now it is important that we continue the job. I am hopeful that my colleagues in the Senate will join the House in working to ensure that these tax cuts will be in place for years to come. It is the true answer to a sound economy that offers a future, and prosperity to the next generation.