Statement on Passage of Tax Extension Bill

Restoring the economy to full strength must be Congress’ top priority.  Allowing taxes to increase during a recession would jeopardize economic recovery and cause further job losses.  Today the full United States House of Representatives passed compromise tax legislation (H.R. 4853) that rightly puts our economy ahead of politics.  

H.R. 4853 will preserve current income tax rates for all Americans for at least the next two years.  Without the enactment of H.R. 4853, the lowest income tax rate would increase from 10% to 15%.  Most other income tax rates would increase as well.  The “marriage penalty” would fully return, the “death tax” would reach up to 55% of estates, and 15 million more middle-income taxpayers would have to pay the Alternative Minimum Tax.  Taxes would increase on capital gains, dividends, and small businesses.  The average middle income family would see their taxes go up by $1,540. 

In all, H.R. 4853 halts a $3.9 trillion tax increase scheduled to take effect on January 1, 2011 – keeping that money in the hands of the private sector instead of the government.  Other components of H.R. 4853 would extend unemployment compensation benefits for an additional year and create a “payroll tax holiday” amounting to 2% of workers’ wages for one year.   

While some Members of Congress may support some elements of the package but not others, it was important to find common ground.  Failure to act would have increased the uncertainty that already exists in the economy – an uncertainty that stops businesses from hiring and contributes to our nearly 10% unemployment rate. 

H.R. 4853 passed the House by a vote of 277 to 148.  It previously passed the Senate by a vote of 81 to 19.  Because it reflects an agreement negotiated between President Barack Obama and Members of both parties in Congress, President Obama is expected to sign the measure into law.