By U.S. Senator Tim Johnson (D-SD)
Shortly after the fall elections, Congress will address some very serious issues that will impact nearly every South Dakotan. I am working with members of both parties to find consensus on the fiscal decisions we have to make. There is a lot of disagreement, but there is one thing every member of Congress should agree on right now. That is that we should not raise taxes on the middle class. The encouraging thing is we are only one vote away from taking this possibility off the table.
In July, the Senate passed a bill that would extend the current tax rates on income up to $250,000, which are set to expire January 1. This would prevent taxes on middle class families from going up $2,200 next year. In South Dakota, this would ensure that 98.5 percent of federal taxpayers won't face a tax hike. Moreover, 100 percent of federal taxpaying families would keep the same rate on the first $250,000 they earn.
I want to give folks certainty that come January 1 their bottom line won't be affected. The House of Representatives should follow our lead and pass tax cuts for the middle class as soon as they return to Washington from August recess. After the President signs this important tax cut into law, we can and should have a serious debate about the rates millionaires and billionaires pay.
As everyone knows, our country is in serious debt. Tax cuts that disproportionately benefited the extremely wealthy, two wars, and the Medicare prescription drug bill were all policies that we did not pay for and have significantly contributed to our exploding debt. We have to pay off our federal debt, and we need to tackle the problem soon. In order to do this, we need to consider both our spending and revenue. I already have supported major spending cuts and will continue to root out wasteful spending to get us out of this rut.
To address our debt crisis, everything must remain on the table. I think the right approach is to close loopholes for large corporations and oil companies and return tax rates for the richest two percent of Americans to where they were in the 1990s. During the Clinton Administration, the economy was booming and we had three consecutive years of budget surpluses. We repaid $400 billion of our national debt and a $5.6 trillion surplus was projected. The circumstances have changed, and we can no longer afford to give more tax breaks to those who need them the least. To return our country to a responsible budget outlook, the wealthiest among us need to pay their fair share.
I look forward to having this debate. However, let's not allow an argument over tax rates for the very rich to affect the bottom lines of 98.5 percent of South Dakotans. Let's pass a tax cut for the middle class so South Dakota families don't have to worry about a tax hike on January 1.