WASHINGTON, D.C. - The Republican substitute amendment to H.R. 1, the American Recovery and Reinvestment Act of 2009, would eliminate meaningful tax relief to middle-class families and deny critical benefits those who have lost their jobs and health insurance due to the economic crisis. Further, the GOP substitute fails to create jobs by eliminating critical investments in America’s infrastructure, Health IT, and renewable energy technology. Finally, the GOP bill claims to offer “relief" from the alternative minimum tax (AMT), when in fact their “relief" would still force 26 million Americans to pay higher taxes this year under the AMT.
“The Republican substitute cuts nearly all forms of assistance to middle-class families struggling during the downturn," said Charles B. Rangel (D-NY), Chairman of the Ways and Means Committee. “It gives $48 billion in tax cuts to those who are prospering even in this economic downturn, lobbyists on K Street, lawyers, and high-paid professionals, while denying critical assistance to the people who work for them."
According to a Center on Budget and Policy Priorities analysis, roughly 23 million lower-income taxpayers would receive nothing at all under the GOP substitute, compared to legislation written by House Democrats which would cut taxes for 95% of all working families under the “Making Work Pay" credit.
ELIMINATES ASSISTANCE TO STRUGGLING AMERICANS
· Eliminates the “Making Work Pay" tax credit that will provide 95% of working families with a tax cut. Under the Republican substitute, only about the top fifth (21%) of households would get the full tax cut.
· Eliminates tax relief for 16 million children by striking the child tax credit improvements.
· Eliminates the “American Opportunity" tax credit that will provide tax relief for more than 4 million students.
· Eliminates COBRA Provisions that would help maintain health insurance for people who have lost their jobs in this recession.
ELIMINATES INVESTMENTS IN NEW JOBS & TECHNOLOGY
The Republican substitute would completely eliminate $550 billion in targeted priority investments included in H.R. 1 for (1) clean, efficient, American energy, (2) transforming our economy with science and technology, (3) modernizing roads, bridges, transit and waterways, (4) education for the 21st century, (5) lowering healthcare costs, (6) helping workers hurt by the economy and (7) saving public sector jobs and protect vital services.
· Eliminates investments in clean, efficient, American energy
· Eliminates investments in Health IT
· Eliminates projects to modernize schools, roads, bridges, transit and waterways
Republican Amendment would:
Give A Final Gift To Doctors, Lawyers, Lobbyists, and other High-paid Professionals
Republicans argue that Democrats do very little for small businesses in H.R. 1, but, with one exception, the Republican substitute largely follows the Democratic bill. Their substitute does not provide anything significantly greater for small businesses that are losing money today and struggling to survive.
But the Republican substitute would provide $48 billion in tax cuts to those who are prospering even in this economic downturn. Doctors, lawyers, lobbyists on K Street, and other high-paid professionals are defined as “small businesses" under the Republican substitute. They would receive a 20% reduction in their tax rates (reducing the top rate from 35% to 28%).
The Republican substitute carefully provides a rate reduction for the boss, but excludes all employees of these so-called “small businesses" from this tax benefit. Partners in lobby firms would get a major rate reduction but their secretaries would not. The Republican substitute goes out of its way to ensure that these high-paid professionals would be eligible for this new relief.
Force Six Times as Many Taxpayers Onto The AMT
The so-called “AMT relief" in the Republican substitute is dishonest. Under the “AMT relief" provided under the Republican substitute, the number of taxpayers affected by the AMT would grow to 26 million taxpayers in 2009 and 28 million taxpayers in 2010 -- six times as many taxpayers as in 2008. Last year, Congress provided AMT relief to ensure that the AMT did not grow beyond the 4.2 million taxpayers that were already affected by the AMT. A six-fold increase in the number of taxpayers that are subject to the AMT is hardly tax relief - ask the 26 million taxpayers who would pay the AMT in 2009.
