April 07, 2010

TAX FREEDOM?

By Idaho Senator Mike Crapo

This April, Americans will feel the sting of two rather unpleasant days within the span of one week. Last Friday, April 9th, was Tax Freedom Day 2010; and, as everyone knows, Thursday, April 15, 2010, is Tax Day. Tax Freedom Day is the day on which the nonpartisan Tax Foundation estimates that Americans have earned enough money to pay for all federal, state and local taxes for the year. This year, Tax Freedom Day comes on the 99th day of the year, which means that your earnings for 99 of the 365 days in 2010 go toward paying taxes. Three additional, and further unpleasant, points in the Tax Foundation study caught my eye:

• Americans will pay more in taxes this year than they will spend on food, clothing and shelter combined.
• The current historically high deficits and debt will cause future Tax Freedom Days to come even later in the year.
• If Americans were required to pay for all government spending this year, including the $1.3 trillion federal budget deficit, they would be working until May 17 before they had earned enough to pay their taxes-an additional 38 days of work.

In addition, at the end of the year 2010, the tax relief of 2001 and 2003 is set to expire. This means, if Congress does not act, every single American will see tax rates increase on their income, on their capital gains and dividends, and they will no longer have many of the other targeted tax relief provisions enacted in 2001 and 2003, including relief from the marriage penalty. Over the past year, the federal government has spent unprecedented amounts on "bailouts" and "stimulus" bills, which pushed last year's deficit to triple that of the previous year's already record deficit. But there is no tax relief planned for the average American.

The President promised that, under his Administration, no one making less than $250,000 would see taxes raised by "a single dime," but with all the spending that the federal government has done over the past year, plus all the spending it has planned for this year, those pushing for this unbridled spending will also push for tax increases on middle-income earners to help pay for it. The health care bill alone included tax increases for more than 73 million middle-income American households. My efforts to stop these tax increases were denied when my amendment to eliminate from the health care bill any tax increases on those making under $200,000 was voted down.

As Idahoans, along with all Americans, prepare for Tax Day 2010, we do so with more uncertainty than ever. This uncertainty about what Congress will and will not do is a contributing factor to our continued sluggish economy. As a member of the Senate Finance Committee, I am continuing to urge my colleagues to act immediately to provide Idahoans and all Americans with certainty and predictability as they make decisions that will affect their tax returns next year.

These record increases in spending and the coming tax increases will harm the economy and the country. Rather than tax increases, we need to reduce spending and encourage growth, investment and expansion, which means more jobs for more people. Next year, let's move Tax Freedom day into March, or even February, so when April 15th comes again, Americans will keep more of their hard-earned money to spend as they, rather than Washington, D.C., see fit. Please go to http://crapo.senate.gov for more about my positions on taxation, spending, Tax Freedom Day and Tax Day 2010.

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