Rep. Bruce Braley (IA-01) introduced legislation today that would extend middle class tax cuts for two years and allow the Bush tax cuts for rich Americans making over $250,000 per year to expire at the end of 2012.
According to the Iowa Department of Revenue, in tax year 2010, 99.2 percent of Iowa taxpayers reported income under $250,000.
On Monday and again yesterday in Cedar Rapids, President Obama called on Congress to renew middle class tax cuts while allowing the Bush tax cuts for the wealthiest Americans to expire.
"The Bush tax cuts for the rich a decade ago are a big reason why we're facing record budget deficits today," Braley said. "Extending middle class tax cuts will keep money in the pockets of more Iowa families, helping to drive job creation and economic growth. Rolling back the Bush tax cuts for wealthy Americans making more than $250,000 will help close the deficit.
"With this bill, we're trying to bring Democrats and Republicans together around a fiscally responsible compromise. It deserves bipartisan support."
Unless Congress acts by the end of 2012, the Bush tax cuts will expire completely. Braley's Middle Class Tax Cut Protection Act would extend through 2014 the tax cuts for American families making less than $250,000 per year. Braley's bill would protect a reduced capital gains tax rate for these taxpayers.
For rich families making more than $250,000 per year, the Bush tax cuts would expire. The capital gains tax rate for these taxpayers would revert to a top rate of 20 percent.
Braley's bill also protects the American Opportunity Tax Credit (a $2,500 tax credit for college expenses), expanded child tax credits, and the Earned Income Tax Credit for families that work and have children.
The cost of extending the Bush tax cuts for the wealthiest Americans (those making over $250,000 per year) is estimated at $850 billion over 10 years.