Congressman McCaul Votes Against Largest Tax Increase in American History
AUSTIN – In the face of $4 gas and a sluggish economy, Congressman Michael McCaul (R-TX 10) voted today to spare American taxpayers any more anguish at the hands of the Democratic-controlled Congress.
"It is unconscionable that Democrats want to kick American families while they are down," Rep. McCaul said. "Four dollar gas is bad enough. Now the Democrats controlling Congress want to increase everyone’s taxes and dig an even deeper hole in our economy."
Congressman McCaul joined House Republicans in voting against the Democrats’ record tax increase proposed in their budget outline for FY2009. Taxes will increase because the plan fails to extend tax breaks that kept money in families’ pockets and helped sustain the economy. And for the first time, total discretionary spending will top $1 trillion. Highlights of the largest tax increase in American history include:
Tax cut
Expiration Date
Marriage Penalty
(Reduces standard deduction for joint filing)
200% of individual deduction to 167%
Child Tax Credit ($1,000 drops to $500) 12-31-2010
Death Tax Reduction (0% percent increases to 55%) 12-31-2010
State and Local Sales Tax Deduction EXPIRED
*Texas is one of only 7 states without a state income tax which is deductible on federal income tax returns. The sales tax deduction allowed Texans to realize a similar tax savings.
Dividends Taxed at Capitol Gains Rate 12-31-2010
Taxed at income tax rate
Lowered income tax brackets 12-31-2010
The marginal income tax rates will increase as follows:
o
o
o
o
o
35% bracket will increase to 39.6% 33% bracket will increase to 36% 28% bracket will increase to 31% 25% bracket will increase to 28% 10% and 15% brackets will condense to 15%
Reduced Capital Gains Rate 12-31-2010
The capital gains rates for individuals will increase from
o
o
0% to 10%. 15% to 20%
"The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital… the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy."
- President John F. Kennedy, 1963
Spending in FY09 Democratic Budget Resolution
Total Discretionary spending in 2009 $1.016 trillion
$21 billion over the President’s request
$241 billion in additional spending over 5 years
Total Spending (including mandatory entitlements)
$3.03 trillion
"The United States cannot continue down this path of reckless spending and tax hikes," said Rep. McCaul, who saw first-hand the struggles of families and businesses when he toured the 10th Congressional District last week. "Every business is hurting and every household is hurting, every time they fill up their cars or go to the grocery store. With a struggling economy the last thing our country needs is to increase taxes. Principally, I believe it is wrong. But this increase from the Democrats couldn’t come at a worse time."
In contrast, Congressman McCaul supports the Republican budget of lower, responsible spending as well as his balanced American-Made Energy plan to gain energy independence, economic stability and lower gas prices. Democrats, meantime, continue to block legislation allowing the United States to drill for more oil domestically even though the technology exists to preserve the sensitive environment in "off limits" areas.
The Democrats’ record tax proposal comes on the same day that gas climbed to another record of $3.99 per gallon, a 71% increase since Democrats took control of Congress 17 months ago when a gallon of unleaded sold for $2.33. And it comes on the same day that Houston-based Continental Airlines announced extensive job and service cuts directly related to the price of fuel because of what it calls the "worst crisis since 9/11".
12-31-2010