With all of the Republicans’ talk and pledges to never vote for a tax increase, one wouldn’t think that they would propose legislation that will raise taxes on millions of poor and middle class working Americans. But that’s exactly what their new tax plan would do. The proposal, which was written by Utah Senator Orrin Hatch and put forward by Senate Minority Leader Mitch McConnell — the man who said “We ought not raise anybody’s taxes at the end of the year” — would extend the Bush tax cuts for everyone, but it will also let the tax cuts implemented under Obama to expire.
The Obama administration and the Democrats have pushed to extend the tax cuts that were passed under the 2009 economic stimulus law. The stimulus expanded the Earned Income Tax Credit to reduce the “marriage penalty” and to provide additional benefits for families with three or more children, while also enabling more families to become eligible for the Child Tax Credit. Currently, a family with one full-time minimum wage earner and two children receives a total child tax credit of $1,812. If Obama’s tax cuts are allowed to expire, the same family’s credit would drop to $267, a loss of $1,545.
Obama’s 2009 plan also included the American Opportunity Tax Credit — a tax credit that 9.1 million American families claimed in 2011 — which increased the tax break for middle class families paying higher-education expenses from about $1,800 to $2,500 . If the Republicans’ legislation is adopted, low income and middle class families would lose those important benefits. Jonathan Weisman sums it up in The New York Times: “In all, the Republican plan would extend tax cuts for 2.7 million affluent families while allowing tax breaks to expire for 13 million on the bottom of the income spectrum, tax analysts say.”
Senate Majority Leader Harry Reid pointed out the hypocrisy here. “Senator Hatch’s amendment would extend tax breaks for the top 2 percent of Americans,” Reid said. “But it fails to extend a number of tax cuts that help middle-class families get by in a tough economy.” Seth Hanlon, Director of Fiscal Reform at American Progress, charts the damaging effects:
The tax battle between the Democrats and Republicans is expected to begin in earnest with a Wednesday Senate vote to start debate on the Democrats’ legislation to extend current income tax rates only to those making under $250,000 a year. Republicans will have a chance to vote on their alternative tax plan if the Democratic bill receives the necessary 60 votes. Meanwhile, a House vote on a Republican proposal that also lets the 2009 tax cuts expire is expected next week.
Although many are convinced that the looming fiscal crisis won’t be dealt with until after the November elections, the Republican party has shown their clear apathy for those in the lower income spectrum. Hatch’s legislation that allows all tax cuts for the wealthy to be extended, but doesn’t provide the same generosity for others, only reinforces the immense class divide in America today.Click here for reuse options!
Copyright 2012 The National Memo