Today, Congresswoman Lois Capps (D-Calif) voted to permanently extend income tax relief for the middle class, individuals making up to $200,000 a year and families making up to $250,000 a year. Extending current income tax rates will save the average middle class family on the Central Coast $1,000 a year. The wealthiest three percent of Americans will continue to be taxed at a reduced rate on either the first $200,000 or $250,000 of income. Income in excess of $250,000 will be taxed at 1990s income tax levels. Not extending the Bush tax cuts to income earned in excess of either $200,000 or $250,000, will reduce the deficit by $700 billion. The legislation passed by a vote of 234-188. Only three Republicans voted in favor of middle class tax relief.
"Strengthening the economy and reducing the debt are two of my top priorities, and a vote for permanent middle class tax relief is a vote to strengthen the economy and reduce the debt. Middle class families are still struggling to recover from the worst recession since the Great Depression, and putting extra money in their pockets will boost the economy. In contrast, economists are in near unanimous agreement that giving millionaires and billionaires tax cuts is going to do little to jumpstart economic growth. Additionally, 97% of small businesses will receive a full extension of their tax cuts," said Capps.
According to Census data, in California's 23rd Congressional district, only five percent of households earn more than $200,000 annually. At least 95% of households in California's 23rd congressional district will receive a tax break on their entire income. (Data does not include the number of households that earn between $200,000 and $250,000 a year)
In addition to the income tax rate, the bill permanently extends other tax cuts enacted for middle class families in 2001 and 2003 including marriage penalty relief, capital gains and dividends rates, and the $1,000 child tax credit for earnings above $3,000. The bill also protects more than 25 million taxpayers from the alternative minimum tax by extending the AMT patch through 2011 as well as permanently extending small business expensing.