House Republicans Push Through Tax Breaks for the Super Wealthy

House Republicans Push Through Tax Breaks for the Super Wealthy

Sham Bill Provides Little Relief for the Middle Class and Comes on the Heels of Cuts to Programs Aiding Working Families

Today, House Republicans pushed through a $70 billion Republican-crafted tax reconciliation bill. The Republican tax bill provides over $50 billion in extensions of capital gains and dividend tax breaks that do not expire until January 2009. In contrast, the measure only provides one year of relief from the Alternative Minimum Tax (AMT), relief that primarily benefits middle-income taxpayers. The bill also includes a number of gimmicks that allowed the tax cut bill to comply with Senate budget rules while providing additional tax relief for wealthy taxpayers.

During debate, Democrats noted that the extension of dividend and capital gains benefits primarily benefits the wealthiest Americans. Specifically, they noted that the average American family (those making less than $50,000) will save an average of only $10 per year from the extension of the capital gains and dividend rate cuts. In contrast, taxpayers with annual incomes over $1 million (about one-tenth of one percent of all taxpayers) will receive approximately 43% of the total benefit of the extended rate cuts, saving an average of $41,400 a year. Notably, not too long ago, Republicans voted to cut spending for health care programs for the needy, Medicare and a variety of programs serving single-parent families, foster children, low-income seniors and disabled Americans. In addition, Republican leaders are currently proposing additional budget cuts that would slash funding for health care programs, education and a number of social service programs.

Further, during debate on the Republican tax bill, Republicans suggested that the addition of AMT relief to the bill provided the middle-class tax relief that Democrats had been seeking. Democrats, however, noted that they had recently voted six times to aid middle-income taxpayers by providing relief from the AMT without coupling the relief with additional tax breaks for the super wealthy. In addition, during debate, Democrats expressed concern that the Republican bill extends capital gains and dividend rate cuts for multiple years while providing only one year of relief from the AMT.

"Republicans essentially told us that If we wanted provide relief from the AMT to the middle-class we had to swallow the bitter pill of more than $50 billion in tax breaks for the rich," said Ways and Means Senior Democrat Charles Rangel (D-NY). "This was an unacceptable and unnecessary demand. Republicans once again kowtowed to their base, voting to extend untimely, revenue decreasing, deficit increasing tax breaks for the very rich," Rangel concluded.

http://www.house.gov/list/press/wm31_democrats/060510_house_republicans_push_through_tax_breaks_for_the_super_wealthy.html