FROM THE OFFICE OF PUBLIC AFFAIRS
January 16, 2002PO-928
AMERICAN FAMILIES AND WORKERS
Congress approved, and the law now provides for significant future tax relief for individuals and small businesses. Any repeal of a scheduled reduction in taxes is, by definition, a tax increase. The following is a breakdown of who loses from the repeal of any scheduled tax relief.
Repealing the President's tax cuts would hurt two-income families with children by:
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Reinstating the marriage penalty- Raises taxes on married couples and families by $50 billion
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Reducing the child credit- Today, the credit is $600, it is scheduled to rise to $1000 per child
- Freezing at today's level, as opposed to the fully phased in tax relief, would cost a family with 2 children $800 in tax relief each year
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Raising income tax rates on millions of working families- 36 million taxpayers will pay higher taxes if the scheduled rate reduction to 25% is repealed
- Two-thirds of those taxpayers have incomes under $100,000
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Reducing the value of the personal exemptions and itemized deductionsRepealing the President's tax cuts would hurt small businesses -- the engines of job creation in our economy:
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10 million small business owners would pay higher taxes if the scheduled rate reduction to 25% is repealed¨
80% of the benefit of reducing the top two income tax rates goes to business owners who file individual returns¨
Reinstating the death tax threatens the survival of small businesses and the jobs they provide when the businesses pass from one generation to the nextRepealing the President's tax cuts would undermine financial security:
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Eliminating the scheduled increases in the annual contribution limit for IRAs and 401(k)s makes it harder to save for retirement- Today the limit for IRAs is $3,000, it is scheduled to rise to $5,000
- Today the limit for 401(k)s is $11,000, it is scheduled to rise to $15,000
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Repealing the scheduled reduction in the death tax would limit parents ability to pass their life's earnings on to their children