Today, the House of Representatives voted on a measure to extend the 2001 and 2003 taxpayer relief laws, but only for those individuals making $200,000 and below ($250,000 for joint filers). We sent a Vote Alert to all House offices in opposition to the bill, but it ultimately passed 234-188.
We have said it before, and we’ll say it again: failing to extend all tax cuts will deal a severe blow to small businesses and our entire economy – a risk we cannot afford given the recent financial crisis. Small businesses are responsible for 70 percent of job creation in America, but half of small business owners fall into the top two income tax brackets, yielding severe consequences for everyone if rates are not extended.
Furthermore, you may recall that we distributed an Open Letter to Congress, signed by 313 economists from across the nation, advocating an extension of all current tax rates on income and investments. There is broad support for a full extension because American taxpayers understand the importance of shrinking unemployment in order to turn around the economy. Boosting taxes, for anyone, is not the solution to our current challenges.
It’s also worth mentioning that the House Majority brought up today’s vote under a closed rule, which means no substitute and no amendments that could significantly improve the legislation. And since we’re told that the bill is as good as dead upon arrival in the Senate, it leads us to question the purpose of such a dead-end, procedural tactic. It does not help middle class families, but rather deceives the American people, further alienates opposing viewpoints, and ignores the critical issue at hand.
There is speculation that the appointed tax cut team continues to work on a compromise and, potentially, a full 2-year extension of all current rates. While we would like to see a full, permanent extension, the rumored “compromise” would be far better than allowing some rates to return to pre-2001 levels. Plus, the death tax was not included in today’s bill. If Congress fails to act, that levy will automatically go from a 0% rate to a 55% rate in 2011.