U.S. Senator Lamar Alexander announced today that he will join fellow Republican Senators Tuesday in introducing legislation to make permanent the tax cuts of 2001 and 2003, which will otherwise expire under the budget passed last month by the Senate Democratic leadership.
“The Democratic leadership’s budget would result in a $2,052 tax hike for a Tennessee family of four earning $40,000 a year,” Alexander said. “Overall, it’s the largest tax increase in American history, and it’s certainly the last thing the economy needs right now.”
“Lower taxes mean a stronger economy and more jobs. Instead of finding new ways to spend taxpayer dollars, Congress should be focused on identifying and ending ineffective and duplicative federal programs,” Alexander said, noting his previous cosponsorship of legislation by Senator Sam Brownback (R-KS) to do exactly that.
The Republican tax legislation, which is expected to be introduced tomorrow, would make permanent the current individual income tax rate structure of 35, 33, 28 and 25 percent. Those rates -- which were reduced from 39.6, 36, 31, and 28 percent in 2001 -- are slated to return to the higher levels at the end of 2010 if Congress fails to take further action.
In addition to making those reduced tax rates permanent, the measure would:
Fully repeal the death tax.
Fully repeal the Alternative Minimum Tax.
Make permanent the current capital gains and dividends tax rates.
Make permanent the current increased limits on small business expensing.
Make permanent the research and development tax credit.
Renew Trade Promotion Authority for 5 more years.
The Democratic budget proposal passed the Senate on an almost exclusively party-line vote of 52 to 47 on March 23, 2007. It must still be reconciled with a budget resolution passed by the House of Representatives before becoming law.