I no longer support a “Bush Tax Cuts”
extension.
Collectively known as the “Bush Tax
Cuts”, the Economic
Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and
Jobs
and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) made
sweeping changes to the U.S. Tax code.
Among other things, EGTRRA
and JGTRRA lowered the tax rate on the bottom fifth of income earners
by 5 points, from 15% to 10%, a full one-third cut in their tax
burden. Also lowered were the tax rates for the next four income
tiers from 28 to 25, from 31 to 28, from 36 to 33, and from 39.6 to 35 respectively. The acts also increased child tax credits and eliminated the
marriage penalty, while lowering the tax rates on inheritances,
capital gains, and dividends.
The acts contained 2010 sunset
provisions, but were given two year extensions through 2012. President Obama and Congressional Democrats, in their desire to make
the wealthy pay their “fair” share, have moved to block further
extensions of EGTRRA and JGTRRA. They intend to force sunsetting of
the “Bush Tax Cuts” and allow them to expire at the end of this
year. Without those extensions, the tax rates will return to their
former levels.
That will mean a 13.1% tax increase on the top
one-fifth of incomes, with increases of 9.1%, 10.7%, and 12% for the
next three tiers, and a whopping 50% tax increase for those in the
lowest bracket. The
child tax credit will drop from $1,000 to $500. The marriage penalty
will return. Estates will be gutted by a 55% death tax. Return on investment, capital gains,
will drop by one-third as the tax rate increases from 15% to 20%. Dividends, a major funding source for retirement accounts currently taxed at 15%, will be taxed at the same rate as ordinary wages, up to 39.6% for those at the top
level.
So, instead of supporting a continued “Bus Tax Cuts” extension, I now stand in full opposition
to the “Obama Tax Increases”. $500 BILLION in tax increases that could cripple an already
struggling economy, starting
January 1, 2013.
Dennis P. O'Neil
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