Congressman John Shimkus (R, Illinois-19) voted late New Year's Day to extend most of the tax rates that he first voted for under President George W. Bush. The package cut tax rates that went up January 1, 2013, and extended the farm bill.
"This package will make the Bush tax cuts permanent for those under the income levels set in the agreement. Maintaining the current tax rates is important for both families and the economy," Shimkus said.
"A debate is still to come regarding more spending cuts, particularly since this agreement does not raise the debt ceiling as the President had initially wanted," Shimkus stated. "I still believe we can have entitlement reform in the months to come."
The tax items in the package include:
+ permanent extension of current tax rates for those up to $400,000 income for singles or $450,000 income for couples;
+ permanent capital gain and dividend tax rates at 15 percent up to the same income levels and 20 percent above $400,000 and $450,000;
+ permanent estate tax exemption of $5 million indexed for inflation;
+ permanent indexing of the Alternative Minimum Tax for inflation (ending an annual fix to avoid millions of taxpayers from paying the AMT);
+ retains the $1,000 child tax credit; and
+ retains marriage penalty relief.
"The typical family of four was set to see a tax hike of $2,200," Shimkus noted. "Maintaining the current tax rates for nearly every American is vital to our economy. Both families and businesses will benefit from this agreement.
"An additional benefit is that the farm bill is extended, which stops an immediate increase in milk prices and provides some certainty for our farmers in the upcoming planting season."
The package passed the Senate 89-8 very early New Years Day and the House late New Years Day.