Washington  -  Once upon a time, there were millions of  working Americans who, every April, diligently paid their federal taxes.  Some years, the taxes were high, and some  years, they were low.  Without going into who the wicked stepsisters might be, let us just say that American workers have a lot in common with Cinderella.

Just like Cinderella in the story, Americans work hard all year long.  When it comes time for the ball, however, we are filling out our tax returns – fingers crossed and hoping for a refund on our federal withholdings.

The U.S. tax code is no fairy tale, and it is a much more imposing document than something concocted by the Brothers Grimm.  For many Americans, this year has been a pleasant dance with their tax forms.  But just as happens in the story of Cinderella, midnight is approaching.  Within two years, much of the relief will begin to phase out.  At the stroke of the year 2011, the tax reforms Congress has enacted will turn into a
pumpkin, and the American taxpayer will be left holding an empty glass slipper.

For many, this last fiscal year brought the first real benefits of tax cuts enacted by Congress in 2001.  Married couples witnessed the reduction of the marriage penalty.  Retirees benefitted from higher earnings limits on their social security.  Families with children found extra help in the expanded child tax credit.  Repeal of the death tax
has enabled farming families and small business owners across the country to pass more of their legacies to their children and less of it to Uncle Sam.  Finally, expansion of the ten percent tax bracket has benefitted every American who pays federal income taxes – especially low-to-middle income families.

Unfortunately, much of the $1.7 trillion of tax relief Congress passed was set to expire ten years from the day they took effect.  The mass expiration will result in the equivalent of a massive, automatic tax increase.

That tax increase, the mere possibility of it, threatens our economic recovery.

Financial markets operate primarily on the basis of expectations – just like family budgets.  If you think you will be receiving a raise or retiring, you would plan accordingly.  Similarly, the prospect of a gigantic increase in taxes affects expectations of our economy as a whole.

I understand that not all Americans invest in stocks or bonds directly, but the success of these investments is indirectly connected to the quality of life for millions of Americans who never owned them.  Interest rates are a major concern for every American who owns a home, finances the purchase of a car, or uses a credit card.  The growth of retirement accounts and pensions is directly linked to the performance of
stocks and bonds. 

All in all, tax relief has played a major role in the ability of working families to invest in their savings and, more importantly, to invest in themselves.  The injection of dollars into American businesses and savings accounts has helped our entire economy rebound.  The threat of higher taxes (and, by association, prices) could undo the economic good accomplished by recent tax relief. 

If the repeal of the death tax were to expire, for instance, there would actually be an incentive for senior citizens to die in order to pass more of their farms or businesses on to their heirs.  If relief from the marriage penalty were to go by the wayside, we would
return to an era when it was to the financial advantage of a couple to NOT get married.  Should the child tax credit and the ten percent bracket expansion be revoked, every working American family would see its tax liability go up.

For these reasons, I have cosponsored measures in Congress to make permanent the tax relief measures most important to American families.  Only swift action can stabilize the family and federal budgets.

And yet, Congress must not allow tax relief to delay the need for real reform of our tax code.  Anyone who has filled out a 1040 can tell you our tax code is too complex, too burdensome, and far from user-friendly.  We must work to make the tax structure
simpler, fairer, and easier to understand.

Still, it is to the benefit of every working American that we address the permanency of these measures now.  Waiting until the 11th hour only guarantees that the decision to make this tax relief permanent will be subjective, arbitrary, and too late to ease market worries.

After the 11th hour passes, we all know what happens.  That ominous stroke of midnight brings with it a devastating transformation – from riches back to rags.  If there is to be a happy ending in this tale of taxes, we must write it now.