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Cornyn Pushes For Increased Tax Relief For Middle-Class Americans

“Hard-working Americans Should Be Central To Any Attempts to Revive the Economy”

WASHINGTON—U.S. Sen. John Cornyn, R-Texas, a member of the Senate Finance Committee, said today he was disappointed two amendments he offered during the committee’s mark-up of the Democrat-sponsored $825 billion economic rescue plan were blocked by Democrats. Sen. Cornyn’s amendments were aimed at significantly increasing tax relief for middle-class Americans.

“There are a number of glaring problems with the economic plan proposed by President Obama and Democrat leaders in Congress. I am committed to trying to improve this inflated bill, which drastically increases the size and scope of the federal government. Any stimulus bill should provide tax relief for all working taxpayers, which translates into real savings for middle-class families.

“As our nation endures the recession and families across Texas and the country are cutting back and making tough financial decisions, it makes no sense that an ‘economic rescue plan’ would be scant on true relief for our middle class. These hard-working men and women should be central to any attempts to revive the economy.

“My amendments would have provided broad tax relief for all Americans by reducing the ten percent income tax bracket to five percent and lowering the tax on capital gains and dividends. This would allow more families to save and invest for the future as they see fit. Although both amendments were ultimately rejected, I remain committed to providing real relief to Americans, and I’m hopeful Democrat leaders will demonstrate their willingness to work together to get our economy back on track.”

More information on the amendments Sen. Cornyn offered to bring greater tax relief to middle-class Americans is below.

Lowering the 10 percent income tax bracket:

• As written, the current legislation would create a new refundable tax credit called “Make America Work” that would be unavailable to individuals who earn $75,000 or married couples who earn $150,000 jointly.
• Sen. Cornyn believes this new credit unfairly attempts to define “middle class” and picks winners and losers based on a skewed and out-of-touch scale.
• Sen. Cornyn’s amendment would lower the 10 percent tax bracket to 5 percent for 2009 and 2010, which would provide relief to more than 105 million taxpayers and a benefit of nearly $500 per year.
• Sen. Cornyn’s amendment would translate into real savings for all taxpayers and ensure Congress is not picking winners and losers during a recession.

Reducing the Capital Gains Tax 

• As written, the current legislation would provide a refundable tax credit to those making up to $75,000 but would not lower the tax on capital gains or dividends.
• Sen. Cornyn’s amendment would expand the current zero tax bracket for long-term capital gains to include individuals who make up to $75,000 and couples who make up to $150,000.
• This would provide relief to middle-income taxpayers such as working parents who want to save and build a nest egg for retirement or sending their children to college.
• Sen. Cornyn believes that by reducing the capital gains tax we can help revitalize the sagging economy.
• Lower taxes on capital help grow investment and capital stock, which will increase economic growth, grow jobs and personal income.

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