Thursday, March 13, 2008
A family of four with two children and an annual income of $56,300 ($50,000 today) will see its taxes increase by more than $2,000 � a 132 percent higher tax bill. A family of four with $67,600 in annual income ($60,000 today) will see its taxes increase by more than $1,800 � a 58 percent higher tax bill.They quote a one-page press release from Treasury, which puts the assessments at $3,675 in 2011 for the current $50k couple w/kids versus $1,583 if the cuts are extended; $5,065 versus $3,207 for the $60k couple w/kids.
The Senate passed a bill today that will cut those numbers down, permanently extending the 10% tax bracket.
By a vote of 99-1, the Senate passed a Democratic amendment to permanently extend a 10 percent tax rate, mostly for low-income earners, along with a child tax credit and marriage penalty relief. These provisions are due to expire at the end of 2010. A Republican amendment that would have extended the remaining tax cuts was defeated.The House, meanwhile, seems determined to go forward with fewer cuts. The House GOP is offering an alternative which has more reduction than the Senate plan. In a press release, Rep. Michele Bachmann described the House alternative in stark terms:
This is an assault on the American family: the Democrats� budget will force a $683 billion tax hike on working families and small businesses. In Minnesota�s 6th Congressional District, this means an average individual tax increase of $2,256 and an average loss of per person income of $1,609. It means 2,665 fewer jobs and $292 million less in our local economy.The Heritage Foundation analysis of the Pelosi plan is here. There are competing arguments out there for whether the Pelosi Democrats are improving or harming tax progressivity. Gerald Prante has a rundown of the arguments.
Families will be attacked from both ends: this punitive budget will shrink opportunity and destroy jobs, while taking yet more money from the pockets of hard-working taxpayers.
I am sure there's more time to deal with these issues after the Novembre elections, but the Democrats I think have a tougher time the later it gets to having all these cuts expire. The numbers I gave in that first quote are numbers for four years from now (tax bills due in 2012), so it's easy to talk about them as being something not entirely real to voters. In 2010, that will no longer be true. So perhaps the time of decision on the Bush tax cuts actually is at hand.