(Washington, DC) -- As citizen groups and lawmakers rallied today at the Capitol in support of newly forged tax relief-extension legislation, participants from the 350,000-member National Taxpayers Union (NTU) urged Congress to act quickly on the package.
"Millions of Americans have benefited as a result of the pro-growth tax reductions on dividends and capital gains," said NTU Senior Government Affairs Manager Kristina Rasmussen. "By extending the lower tax rate on this vital fuel for our economic expansion, the reconciliation bill ensures that Americans will be able to count on some stability in the tax system. Since many large and small investors try to plan on a multi-year financial horizon, middle-class families saving for college or retirement will see greater returns and smaller tax bills if Congress passes this legislation."
In addition, the bill will offer comfort to Americans facing looming liabilities this year from the complex and punitive Alternative Minimum Tax (AMT), a parallel tax system that increasingly traps non-wealthy taxpayers. Prior to the current reconciliation deal, Congress went over five months in 2006 without agreeing to renew the exemption levels that shield millions from the AMT. "Quarterly tax filers, business owners, and others who have been left in tax-planning limbo because of this delay will rest a little easier," Rasmussen noted. "Unfortunately, Congress has only bought them a paltry seven-month respite, by once again failing to find a long-term solution to this persistent taxpayer nuisance."
Rasmussen stressed that even with passage of the reconciliation bill, Congress will have much more work to do in providing tax relief and reforming the laws themselves. In the short term, deductions such as those for mortgage insurance, charitable contributions for non-itemizers, and state and local sales taxes should be enacted or extended. In the long term, making death tax repeal permanent, terminating the AMT, and abolishing the current system in favor of a flat tax or national retail sales tax deserve consideration. NTU's ninth annual study of tax law complexity, released in April, showed that by most measurements the burden of filing taxes has risen despite efforts since 2001 to reduce the burden of paying taxes.
"After the reconciliation bill and its follow-up package are adopted, taxpayers will still be left with many unanswered questions over future tax policies," Rasmussen concluded. "For the sake of our continued prosperity, Congress should confront these issues swiftly and provide Americans with the fairer, simpler, and less burdensome tax system they deserve."
NTU is a non-profit, non-partisan organization founded in 1969 to work for lower taxes and smaller government. Note: The NTU study, A Taxing Trend, along with more information on tax reform options, may be accessed online at www.ntu.org.