Today, U.S. Senator Daniel K. Akaka voted to pass the Middle Class Tax Cut Act, legislation to extend middle class tax cuts for the 98% of American families making less than $250,000 per year, which amounts to an average savings of $1,600 for about half-a-million Hawaii families. The legislation will also extend the American Opportunity Tax Credit, the expanded Child Tax Credit, and the expanded Earned Income Tax Credit. It passed the Senate today by a vote of 51 to 48.
The Senator also voted against a provision introduced by Senator Orin Hatch (R-Utah) that would have allowed the three tax credits to expire while extending tax breaks for the wealthiest Americans at a cost of nearly $1 trillion.
"This country was founded on principles of fairness and responsibility, and this legislation will help restore those values to our tax system," Akaka said. "To cut our deficit, we must ask the wealthiest Americans to pay their fair share. I urge my colleagues in the House of Representatives to schedule a vote on this bill soon and not allow taxes to go up for middle class families because of their inaction."
The bill passed by the Senate today extends all tax cuts for individuals who make up to $200,000 and for married couples who make up to $250,000. Those cuts are worth an average of $1,600 to the typical family. It also extends other tax provisions critical to the middle class that help families afford college, cover their bills, and provide for their children.
The Earned Income Tax Credit is a refundable credit that offers assistance to working individuals and families who earned less than $49,078 in 2011.
The American Opportunity Tax Credit helps middle-class families afford college by covering up to $2,500 of the cost of tuition.
The Child Tax Credit provides hard-working families with $1,000 worth of tax relief for each child under age 17.