Fundamentally, I have always believed that working families know how to spend their money better than the federal government. The more money we can put into the pockets of working Americans helps them participate in this economy and ensure its recovery. An important way Congress can do that is to provide tax relief. Tax cuts are a big help to a great number of families in Arkansas and across America and are critical to ensuring our economy continues to recover and grow.
The Bush-era tax cuts have provided tax relief to Americans since they were passed over a decade ago. However, these tax cuts are set to expire at the end of this year. If Congress cannot reach a compromise on these tax cuts and nothing is done, then every tax-paying American will see their taxes go up on January 1, 2013, representing one of the largest tax increases in American history.
Many of the Bush-era tax cuts were enacted through the Economic Growth and Tax Relief Reconciliation Act of 2001, which I voted for. These tax cuts included a reduction of individual income tax rates, an increase in the child tax credit, and a reduction on corporate taxes in the form of temporary dividend relief. In addition, they increased the exemption amount for the individual Alternative Minimum Tax, reduced the estate tax and lowered taxes on income from dividends and capital gains. In 2006, Congress voted to extend these tax cuts through 2010, and in 2010, Congress voted to extend these tax cuts for two more years, expiring at the end of 2012.
If these tax cuts expire at the end of this year, beginning in 2013 many of the individual tax rates will revert back to their 2000 levels. I believe we should not raise anyone's taxes as we continue to recover from this economic recession. I believe that extending these important tax cuts is critical to help working families and Arkansas's small businesses, strengthen our economy, and create jobs across our state.
I have said from the beginning that I believe raising any taxpayer's taxes in an economic recovery is the wrong approach. That's why I voted last week for H.R. 8, the Job Protection and Recession Prevention Act of 2012, which will extend these important tax cuts. H.R. 8 passed the House of Representatives and must now be considered by the Senate.
Right now it is important for us to focus on the economy, creating new jobs, and putting America back to work. As Congress addresses economic recovery, I don't think there is one silver bullet, one plan or a single piece of legislation that will expedite our economic recovery. There is only so much government can do, even during tough economic times, but cutting taxes and putting more money in the pockets of those who need it is an important step.
As we move forward, I will continue to support legislation that is fiscally responsible, cuts taxes for working families and small businesses, creates jobs here at home and strengthens our state's infrastructure so that we continue our economic recovery.