March 29, 2007

            “This budget unfortunately would allow tax relief measures to expire at the end of 2010, at which time American families would see their taxes increase unless further action is taken to remedy this proposal,” Hall said.  “This is a step in the wrong direction.” 

            The Democrats’ budget would increase income taxes for middle-class families, erase the 10 percent tax bracket for lower-income families and replace it with the 15 percent rate, increase taxes on dividends and capital gains from the lower 15 and 0 percent rates Republicans enacted to 30 percent, and reduce the child tax credit from $1,000 to $500 a year.

            “Tax cuts have helped spur economic growth and provide relief to hard-working Americans,” Hall said.  “They not only should be retained – they should be made permanent.  We’ve had 42 straight months of economic growth and 7.6 million new jobs in less than four years – and we’ve cut the federal deficit in half three years ahead of schedule.  That’s a record we need to build on – not diminish.” 

            Hall supported the Republican budget proposal, which maintains tax cuts enacted in 2001 and 2003, provides for one-year extensions of alternative minimum tax relief, the State and local sales tax deduction, and the research and experimentation tax credit.  “All of these tax cuts are important – and the State and local sales tax deduction is particularly important to Texans and needs to be made permanent,” Hall said. 

The Republican budget freezes nondiscretionary spending at the fiscal year 2007 level and reduces mandatory spending by a total of almost $280 billion over five years.  It changes the pay-as-you-go rule to require that increases in mandatory spending be offset by cuts in mandatory spending – and not tax increases. 

The Republican proposal would increase funding for veterans’ health care $2.8 billion above the President’s request and increase funding for medical research, Community Development Block Grants and science and technology.  “These are important initiatives that I have long supported,” Hall noted.

“I will continue to work for tax relief and tax reform for our citizens,” Hall said.  “I firmly believe that we can grow our way out of the Federal deficit and balance the Federal budget – without raising taxes to do so.”

Groups opposed to the Democrats’ budget included Americans for Tax Reform, Citizens Against Government Waste, Club for Growth, National Taxpayers Union and the Heritage Foundation.