Extending the 2001 and 2003 Tax Relief for Iowa Families

Earlier this week I participated in a hearing of the Senate Finance Committee, where I serve as the Ranking Member, about the 2001 and 2003 tax relief for families and individuals.  That tax relief is set to expire in less than six months.  If Congressional leaders let that happen, a family of four with an annual income of $50,000 will see a $2,155 increase in its tax bill.
 
These bipartisan tax cuts are straight-forward.  Cut rates for everyone, enhance the child tax credit, provide some marriage penalty relief, and enhance tax incentives for education.  If those tax provisions are allowed to expire, the people who will suffer are hard-working American families, small business owners, and even senior citizens relying on the dividends and capital gains from their retirement savings.  

A lot of uncertainty is caused by the possibility of the expiration of this tax relief.  When taxpayers anticipate higher tax rates, it creates a disincentive to engage in productive activity. 

This uncertainty is also relevant to the small business owners of this country.  We all agree that small businesses create 70 percent of the net new jobs in America.  Small business’ health and expansion are the keys to getting the unemployed back to work.  These businesses cannot afford an increase of at least 17 percent of the marginal tax rate, which is what would happen if the tax relief is allowed to expire.  Why significantly raise taxes on the small businesses that we need to create new jobs?

Many Democratic members of Congress want to let these bipartisan tax cuts expire at the end of this year, claiming the government can’t afford the revenue loss.  Yet, these same individuals don’t worry about appropriated spending, for example.  It is ignored over the long-term, even though it accounts for trillions of dollars in new spending.  This double standard doesn’t make sense.  The problem is that the federal government in Washington overspends, not that Americans are under taxed. 

I will continue to advocate for the extension of individual and family tax relief.  It is needed more than ever during an economic recession.