Giffords Calls on Congress to Extend Tax Cuts for Middle Class Families
Congressional Candidate Criticizes Congress for Raising Taxes on Hard-Working Americans
TUCSON €“ Congressional candidate Gabrielle Giffords pledged today to fight to restore vital middle class tax cuts for more than 19 million Americans that the current Congress failed to extend before adjourning last week. By not extending these middle class tax cuts before adjournment, Congress effectively raised taxes on teachers and for those paying college tuition.
“For too long, Washington has ignored the concerns of middle class families here in Southern Arizona, and have instead focused on powerful interests,” said Giffords. “While middle class families will see their taxes go up, Congress did manage to cut the taxes of wealthy Americans like the CEO of ExxonMobil, who saw his taxes cut by $2.5 million. This type of misplaced priority is another example of why we need a new direction in Washington. Southern Arizonans deserve a Congress that will look out for us, not cut taxes for oil company CEOs. I pledge that I will fight to restore these middle class tax cuts if elected to Congress.”
Congress raised taxes on 3.6 million Americans by refusing to extend the college tuition tax deduction. The average cost of a college education has soared by 44 percent during the Bush Administration (College Board, 10/05), yet Congress chose not to extend the popular college tuition tax deduction in this year’s tax reconciliation bill and continues to refuse extending this tax cut as part of the larger extenders package.
Since 2002, teachers have been able to deduct up to $250 a year for money that they spend out of their own pockets to buy supplies for their classrooms. More than 3 million teachers nationwide have taken advantage of this deduction each year. Congress removed a two-year extension of this deduction from the tax reconciliation bill in May and continues to refuse passing this extension along with other vital tax extensions.
Congress also raised taxes on school districts in every state by refusing to extend the bond program to fund school renovations. The authority for school districts to issue Qualified Zone Academy Bonds (QZAB) also expired last year. School districts use these bonds as an innovative way to fund school renovation or repairs at a much lower cost. Investors receive a federal tax credit in lieu of an interest payment, and over the life of the bond, the district can save 50 percent.
Additionally, Congress raised taxes on thousands of businesses by refusing to extend important tax credits that promote job creation and innovation. Because Congress refused to extend the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work (WtW) tax credits, 20,000 businesses will lose their tax incentives for hiring individuals from targeted groups such as veterans and families trying to leave the welfare rolls. Republicans are also blocking the extension of the research and development (R&D) tax credit that helps 16,000 businesses in America innovate and stay competitive. Last week, a coalition of businesses wrote a letter to Congress, warning, “The lapse of the credit and accompanying uncertainty have increased the costs of U.S.-based R&D €¦Congress should put an end to the tax on American innovation and act swiftly to restore and strengthen the federal R&D tax credit.”
Although the Republican majority has blocked Democratic efforts to cut taxes for families since May, here’s one tax cut Congress did pass:
Earlier this year, Congress passed a $70 billion tax cut bill. The bill extends for two years the Bush tax breaks on capital gains and dividends, but only includes a one-year patch for the Alternative Minimum Tax, a tax that is particularly painful for millions of middle class families. The Washington Post called the bill a “windfall for the rich, and a hole in the federal budget.” According to a study by the Brookings Institution Tax Policy Center, middle-income households would receive an average tax cut of $20, while the two-tenths of one percent of households with incomes over $1 million would get average tax cuts of $42,000. The Washington Post wrote that, “This Congress and administration are putting the nation deeper and deeper in debt to benefit a sliver of the population that doesn’t need the help. Someone’s going to have to pay for these deficit-financed tax cuts eventually, and it’s likely to be your grandchildren.” [HR 4297, Vote #135, 5/10/06; Washington Post, 5/11/06]
