|
Since I'm sure this is a form letter, I don't hesitate to post it. I initially wrote to ask him to end the tax cuts for the wealthy, but also to stop the childish game-playing on his side of the aisle and get down to the business of correcting the abuses of the Bush Administration. His response:
I appreciate hearing your comments about tax cuts for the "wealthy." In 2001 and 2003, as then Chairman of the tax writing Finance Committee, I helped shepherd through Congress bipartisan tax relief designed to trigger economic growth and create jobs. These measures include the across-the-board income tax reduction, which reduced taxes on individuals and families of all income. This included reducing the tax rate on the lowest levels of income to 10% from 15% and millions of low-income individuals were removed from the federal income tax rolls entirely. Additionally, the child tax credit was increased from $500 to $1,000 and was expanded by providing a partial credit to certain low-income individuals with no net tax liability. Other measures included marriage penalty relief and the dividends and capital gains tax rate reduction.
In general, these tax relief measures focused on the creation of jobs and let taxpayers keep more of their hard-earned money to save, invest, or spend as they see fit. And, by easing the tax burden on both workers and investors, these bills helped spur economic growth and generate revenue to the federal treasury. In response, the U.S. economy experienced a record 52 months of uninterrupted job gains, adding more than 8 million new jobs. In addition, the Gross Domestic Product, which is the total value of final goods and services produced in the U.S., grew for 24 consecutive quarters at an average rate of 2.78%. At the same time, the expanding economy resulted in an influx of revenue to the federal treasury, which reduced the annual budget deficit from about $415 billion in fiscal year 2004 to $167 billion in fiscal year 2007. However, given the downturn in the economy, the resulting financial crisis, and an unprecedented increase in spending by the federal government we are now experiencing record budget deficits.
Increasing taxes on individuals, families, businesses, or the "wealthy" in these economic hard times would only be a further drag on our economy and not generate expected revenue. The President and my colleagues on the other side of the aisle have even recognized this fact, claiming they will only raise taxes on high-income individuals after 2010. But, if it is true that raising taxes now would reduce economic growth, it will not be any less true in 2011.
The President and my colleagues on the other side of the aisle have proposed to allow the top two marginal tax rates to expire, increasing the top two rates from 33% and 35% to 36% and 39.6% respectively. This proposal has been defended by claiming taxes will only be raised for "wealthy" taxpayers who make over $200,000 a year. For the vast majority of people who earn less than $200,000, raising taxes on higher earners might not sound so bad. However, this means that many small businesses will be hit with a higher tax bill. These small businesses happen to create 74 percent of all new private sector jobs in the United States. In a time when many businesses are struggling to stay afloat, it does not make sense to impose additional burdens on them by raising their taxes. Odds are, they'll cut spending. They'll cancel orders for new equipment, cut health insurance for their employees, stop hiring, and lay people off. Instead of seeking to raise taxes on those who create jobs in our economy, policies need to focus on reducing excessive tax and regulatory barriers that stand in the way of small businesses and the private sector making investments, expanding production, and creating sustainable jobs.
Additionally, I would note that with the 2001 and 2003 tax relief measures fully in effect, the tax rates have become more progressive. The Congressional Budget Office has done an analysis that includes the major federal taxes - individual income taxes, Social Security, Medicare, and unemployment payroll taxes, corporate income taxes, and excise taxes. Their most recent analysis shows the bottom 80% of households pay the lowest rate in nearly three decades while the top 20% pay roughly the historical average. Moreover, the effective federal tax rate on the top 1% of households (31.2%) is more than seven times the rate paid by the bottom 20% of households (4.3%). That's up from less than five times as much in 1979 (37.0% vs. 8.0%).
Again, thank you for contacting me. I appreciate hearing your views and urge you to keep in touch.
|
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
