U.S. Senator Mary L. Landrieu, D-La., today voted in favor of the Middle Class Tax Cut Act, which extends middle class tax cuts for 98 percent of Louisianians, while at the same time, protecting 97 percent of America's small business owners. The legislation also extended the American Opportunity Tax Credit, the expanded Child Tax Credit, and the expanded Earned Income Tax Credit. The bill passed this afternoon by a vote of 51-48.
Sen. Landrieu, Chair of the Senate Small Business and Entrepreneurship Committee, noted that she voted against a Republican provision that would have allowed three key tax breaks to expire, raising taxes on 25 million middle class families, while extending tax breaks for the wealthiest Americans at a cost of nearly $1 trillion.
"Today's vote is a strong step in the right direction in that it will allow middle class families who are still struggling in this challenging economy to count on an extension of these key tax cuts," Sen. Landrieu said. "By the way it was designed, this bill targets the bulk of the relief to middle class families, but in fact is a tax cut for every American on the first $250,000 of adjusted gross income. We made important progress today, and I urge our colleagues in the House to join us in our efforts to protect middle class families while reducing our deficit."
The proposal 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 average Louisiana family. It also extends other tax provisions critical to the middle class -- the American Opportunity Tax Credit, the expanded Child Tax Credit and Earned Income Tax Credit -- that help families afford college, cover their bills and provide for their children.
* 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.
* 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.
In addition to today's vote for middle class tax relief, Landrieu also reiterated her commitment to push for an extension of current estate tax and exemption levels. Without congressional action, the estate tax is set to jump next year from the current top rate of 35 percent, with an exemption level of $5 million; to a top rate of 55 percent, and a much lower exemption level of $1 million.
"This change would be devastating to our small businesses, as federal data shows that the estates of small business owners are twice as likely as the typical estate to owe this tax. At a time when our small businesses continue to struggle to make ends meet, they shouldn't be forced to sell their business assets in order to pay a bigger tax bill," Sen. Landrieu said. "While I wholeheartedly support an extension of current estate tax levels, I could not support the broader Republican tax package that it was included in today. That said, I remain committed to working with my colleagues on both sides of the aisle to find the 60 votes we need to extend the estate tax rate at current levels, in a way that is both fiscally responsible and creates stability for small businesses.