Today, Congressman John Yarmuth criticized House Republicans for supporting a tax proposal that raises taxes on military and middle class families in exchange for a continuation of costly tax breaks for the richest 2 percent of Americans. The bill, which Yarmuth voted against, would raise taxes on approximately 25 million middle-class families by reducing tax credits -- including the child tax credit, which provides critical assistance for working families.
The Republican tax plan would end expansions of the Earned Income Tax Credit (EITC) and the Child Tax Credit, and eliminate the AmericanOpportunity Tax Credit, which helps make college more affordable for middle class families. The Republican tax plan would raise taxes on 25 million families by an average $1,000 to help pay for an additional tax cut of $160,000 for the richest 2 percent of Americans.
"House Republicans are so dedicated to giving the richest 2 percent yet another tax cut we can't afford that they're willing to raise taxes on military families to do it," Yarmuth said. "At a time when the vast majority of Americans are demanding fairness in the tax code, the last thing Congress should be doing is giving away billions of dollars to those who don't need it and sticking the middle class with the bill."
By contrast, the Democratic proposal approved by the Senate last week would extend existing tax cuts on income up to $250,000 for all American families, as well as extend those tax credits in their current forms. It would provide nearly $300 million more than the Republican tax plan in tax relief for small businesses.
The Democratic proposal, which Yarmuth voted for on Wednesday, also ends the Bush tax cuts for the richest 2 percent. Ending those cuts reduces the deficit by more than $900 billion over 10 years.
"I was proud to vote for a fair, pragmatic tax proposal that balances the short-term needs of working families with long-term deficit reduction," Yarmuth said. "And I am disappointed that my Republican colleagues have again rejected that balance."
The Center for American Progress produced an analysis showing three examples of military families whose tax bill would be raised under the Republican tax plan. According to 2009 U.S. Census Data, there were more than 43,000 active-duty members of the military in Kentucky. Louisville is home to nearly 60,000 veterans -- 10 percent of the city's population. Many of them would also see a tax hike under the Republican plan.
Examples from the CAP analysis:
MARINE CORPORAL (E4), Four years' service, married with two children
Military basic pay: $27,660
EITC under current tax policy and Democratic plan: $4,326
EITC under Republican plan: $3,878
TAX INCREASE UNDER GOP BILL: $448
AIR FORCE STAFF SERGEANT (E5), eight years' service, married with three children
Basic pay: $34,723
EITC under current tax policy and Democratic plan: $3,508
EITC under H.R. 8: $2,390
TAX INCREASE UNDER GOP BILL: $1,118
U.S. ARMY PRIVATE (E1), first year of service, married with one child
Basic pay: $18,196
Child Tax Credit under current tax policy and Democratic plan: $1,000
Child Tax Credit under H.R. 8: $727
TAX INCREASE UNDER GOP BILL: $273
The competing Democratic tax proposal would ensure that taxes are not raised on these military families or other middle-class families.
Note -- estimates are illustrative and based on 2013 pay rates. They do not include Basic Allowance for Subsistence (BAS) and Basic Allowance for Housing (BAH), which are non-taxable, nor any other additional incentives that a sailor may receive based on rank, training, or job specialties. It also does not include any additional household income.