Today the President called on Congress to extend the middle class tax cuts for the 98 percent of Americans making less than $250,000 for another year. If they don’t, a typical middle-class family of four will see its taxes go up by $2,200 on January 1st. It would be a big blow to working families, and it would drag down our entire economy.
Our prosperity has always come from an economy built on a strong and growing middle class. That’s why the President has cut middle-class taxes every year– by $3,600 for the typical middle class family. No one thinks raising taxes on the middle class is a good idea. This should be one of those rare issues where everyone in Washington can agree. But so far, Congress hasn’t been able to extend middle class tax cuts because Republicans in Washington refuse to ask the wealthy and big corporations to pay their fair share.
In fact, on every issue – from reducing the deficit in a balanced way to paying for investments in education – Republican insistence on cutting taxes for millionaires and billionaires has been the major cause of gridlock in Washington.
When the Congressional Budget Office recently analyzed the economic effects of various policy options, it found that extending the middle class tax cuts would encourage economic growth and boost employment and “would be more cost-effective in boosting output and employment in the short run” relative to also extending the high-income tax cuts. Additionally, economists have said that letting high-income tax cuts expire will have little impact on job creation or economic growth.
- The President’s message to Congress is this: Pass a bill extending the tax cuts for the middle class and he’ll sign it tomorrow. As soon as that’s done, we’ll be glad to have a debate about whether it’s a good idea to extend the tax cuts for the wealthiest Americans.
- We already know that those opposed to this proposal will say we’re trying to tax “job creators.” Well, the folks who create most new jobs in America are America’s small business owners. The President has cut taxes for small business owners 18 times. Today’s proposal will extend tax cuts for 97% of all small business owners in America. 97 percent.
o If Congress fails to act, the typical middle class family of four will see its taxes increase by $2200.
o 11 million families will no longer get help paying for college from the American Opportunity Tax Credit.
o Small businesses will be able to claim immediate tax deductions for only $25,000, rather than $250,000, of new investment.
We look forward to a debate on tax cuts for the wealthy, but right now Congress should act to give middle class families the certainty and security of knowing their taxes won’t go up in six months. There’s no question that in order to grow our economy and create jobs we need to make our tax code simpler and fairer for the middle class and small businesses, and voting to keep taxes low for the middle class will help move us forward in the right direction.
We’ve tried trickle-down economics. It doesn’t work.
- Prosperity has never just trickled down from a wealthy few. Prosperity has always grown from the heart of a strong middle class.
- At the beginning of the last decade, Congress passed trillions of dollars in tax cuts that benefitted the wealthiest Americans more than anyone else. We were told it would lead to more jobs and higher incomes for everybody; that prosperity would start at the top and trickle down.
- The rich got richer, but most Americans struggled. Instead of creating more jobs, we had the slowest job growth in half a century. Instead of widespread prosperity, the typical family saw its income fall. And in just a few years, we went from record surpluses under Bill Clinton to record deficits that we’re still struggling to pay off today.
- We don’t need more top-down economics. We’ve tried that theory. We’ve seen what happens. We can’t afford to go back.