Two years ago, Congress came together in a bipartisan way to extend the 2001 and 2003 tax relief provisions, agreeing that raising taxes in a troubled economy would only prolong high unemployment rates and hurt struggling families and businesses. With unemployment over eight percent for more than 42 months, Congress has the ability to extend tax relief to families and small business owners or allow punishing tax increases to take affect January 1, 2013, according to U.S. Senator Mike Enzi, R-Wyo., who believes an across-the-board extension for one year and focusing on tax reform is the best way forward.
Enzi is supporting the Tax Hike Prevention Act of 2012, written by Senators Orrin Hatch and Mitch McConnell, that would extend the 2001 and 2003 tax relief for one year, including a straight extension of expiring individual tax rates, family tax relief, death tax relief, and a patch to stop the Alternative Minimum Tax (AMT) from hitting millions of Americans with tax penalties in 2012 and 2013. Alternatively, the Senate majority's proposal would send the death tax to 55 percent and allow taxes to increase on small businesses, eliminating much needed jobs.
"Two years ago, we came together in a very bipartisan way to prevent tax increases from hitting our families and small business owners in a down economy," said Enzi. "The only thing that has changed since then is that we're in an election year and it's easy to play to everyone's fears instead of doing what is right. Letting tax relief expire when the economy is still weak could make things worse."
If Congress does not take this opportunity to extend tax relief, all areas of the economy are going to be hit by massive tax increases at the same time as forced spending cuts go into effect, often referred to as the "fiscal cliff."
"Waiting until the last minute to fix our fiscal problems doesn't work. It just creates more problems," said Enzi. "Last-minute wrangling causes Congress to skip certain steps of proper procedures, and creates an environment of rushed agreements and unpredictability. Instead of looking for political leverage, we should be looking to solve our long-term fiscal problems, including a bipartisan effort to reform our tax code to make America more competitive at home and abroad."
The Hatch-McConnell bill directs the Finance Committee to take up comprehensive tax reform in 2013 that focuses on simplifying the tax code, lowering the corporate tax rate and repealing the Alternative Minimum Tax.