Our colleagues across the aisle have apparently forgotten the basics of economics. It is at times frustrating if not disheartening that the Republican Party would deny the American tax payer the use of a tool that not only increases the take home pay of middle income class households but would also create the additional consumer demand that would grow our economy.
That tool is fiscal policy and the Congress has a duty to the American people to use our authority to amend the tax code to help grow the economy and increase jobs. President Obama and the Democratic Party have continually described the benefits of the Middle Class Tax Cut Act ever since President Obama first proposed the legislation last July, and the benefits are substantial.
First, the Act will ensure that 98% of American households with incomes of less than $250,000 a year will benefit from extending the tax cuts of 2001, 2003, and 2010. This means that 114 million American households will benefit from the extension.
Second, 11 million families will continue to benefit from the American Opportunity Tax Credit. This credit provides help to families needing additional assistance to send their children to school. In addition our economy benefits from an increase in the number of educated workers whose numbers are necessary if we are to compete in a global economy.
Third, 35 million households with children will continue to receive the child tax credit. This credit is worth $1,000 per child.
Fourth, married couples will not be penalized with higher taxes because of their tax filing status. Thirty-eight million couples will benefit from eliminating this penalty.
Not only will American households benefit from the tax cut extension, but 97% of small businesses will see benefits from the Middle Class Tax Cut Act. For example, small businesses will continue to see lower tax rates on the first $250,000 of income. Small businesses will also see the continuation of tax deductions for up to $250,000 of business investment. Lower tax rates and tax deductions for investments not only mitigate the risks entrepreneurs take in establishing and expanding their businesses, but also provides incentives for acquiring more capital and hiring more employees.
In addition, the Act provides small businesses with access to immediate tax write-offs for new investment. These write offs could put an additional $50 billion in the hands of our entrepreneurs, the drivers and job creators of the economy.
Instead the Republicans would rather champion a bill that raises taxes on 25 million families making less than $250,000 by an average of $1,000. The Child Tax Credit would be reduced for low and moderate income families.
Meanwhile, the GOP “tax cut” proposal will see families making more than $1 million dollars receive tax cuts averaging $160,000.
The irony is that the Republican Party holds itself out as a family-values party, but would rather harm families in exchange for ensuring that the wealthy do not pay their fair share.
Meantime, we dart toward a fiscal cliff, risking huge spending cuts that will disproportionately target discretionary, non-defense spending. The world, which should be seeing the U.S. as a place for growth will view our unwillingness to spur consumer demand as a negative signal; a sign of no confidence in our own economy and citizens.
We can’t afford to take this risk and harm American families, especially when so many are struggling. It’s time for Republicans and Democrats to focus on growing the economy and creating jobs.