Tierney Questions Sensibility of Republicans' Tax Bill
Tax Cuts for Wealthiest Taxpayers to Pay for Deep Cuts in
Key Education, Health Care and Job Training Programs
Washington, DC - Today, U.S. Congressman John F. Tierney (D-Salem) strongly challenged the Republican Majority's tax reconciliation bill (H.R. 4297) that costs more than $56 billion over five years and primarily benefits the wealthiest taxpayers. The U.S. House of Representatives passed the bill by a vote of 234-197.
"Regrettably, the Republicans' agenda put tax cuts for the wealthiest Americans ahead of the needs of working and middle-class families. I believe that Republican policies are making it more difficult for American families to educate their children, stay healthy, keep or get a job, and care for their elderly parents," said Congressman Tierney.
The Republicans tax bill includes a host of annual tax extensions and has as its centerpiece the extension of the capital gains and dividend tax cut from 2008 to 2010. The distribution of taxable capital gains is highly skewed toward upper-income tax returns, with those making under $50,000 a year collectively receiving only 3.2% of the capital tax cut value while taxpayers making more than $200,000 a year receive 80% of the capital gains tax cut value. The $56 billion bill also will increase the federal deficit. The current national debt exceeds $8 trillion and the cost of interest on the debt will average over $300 billion a year during the next decade.
The tax bill also raises the taxes of nearly 17 million of America's middle-class families, by leaving out a provision to protect them from tax increases under the Alternative Minimum Tax (AMT). The AMT was created to prevent wealthy families from using so many credits, deductions and shelters that they paid no tax but it now threatens to raise taxes on an increasing number of middle-class taxpayers each year because it is not indexed to inflation. Under the Republican plan, nearly one-third of families earning between $75,000 to $100,000 per year will be subject to the AMT next year, which was targeted at the wealthiest taxpayers to make sure they paid their fair share. The tax increase for a family could be as high as $3,640.
On November 17, 2005, the Republican Leadership in the House passed a budget reconciliation bill that included $50 billion in mandatory spending cuts, including cuts to student loans, Medicaid, food stamps and other critical programs.
"After years of neglecting fiscal responsibility and borrowing heavily to pay for tax cuts and the reconstruction efforts in Iraq, Republicans are now cutting programs that primarily serve the most vulnerable Americans in order to pay for their tax cuts," added Congressman Tierney.
"We are in the midst of a great challenge in this country - challenges I feel certain can be met - if we all work together in a shared effort. This bill cuts taxes for a few but avoids making the necessary investments in our future. Together, America can do better but this bill was a step in the wrong direction," concluded Tierney.