Ryan Calls on Congress to Approve His Proposal for Lasting Tax Relief, Prevent Tax Hike in 2011

WASHINGTON – U.S. Representative Paul Ryan (R.-WI.) at a press conference this morning urged colleagues in Congress to vote for legislation that he and Rep. Kenny Hulshof (R.–MO.) introduced, to make permanent the 2001 tax law by striking the December 31, 2010 "sunset". A bill containing the Hulshof-Ryan proposal is scheduled for a vote in the U.S. House of Representatives on Thursday, April 18.

Although the original intent of last year’s tax relief law (the Economic Growth and Tax Relief Reconciliation Act of 2001) was to provide permanent tax relief, opponents used a procedural Senate rule to force this law to sunset December 31, 2010. As a result, taxpayers presently face an enormous federal tax increase on January 1, 2011.

"If we don’t make this tax relief permanent, it would set the stage for the largest overnight tax increase in U.S. history," Ryan said. "The massive tax hike in 2011 would hit families and small businesses hard and deliver a devastating blow to our economy."

"On the other hand, locking in tax relief permanency would bring needed certainty to the tax picture – boosting economic growth and job creation," Ryan said. "Making the tax relief permanent would let families keep more of their money over the long term and help individual taxpayers save more for their retirement."

"It would also help small businesses grow and generate jobs by making tax relief something they can count on down the road," Ryan said. "Most small businesses file as individuals and are subject to the top individual tax rate. Take away last year’s tax relief, and these businesses face a federal income tax rate of nearly 40 percent – larger than the tax rate big corporations pay, which is 35 percent. The tax bill corrects this inequity and simply lowers the small business tax rate to the corporate tax rate."

The table below illustrates, in part, what would happen if the sunset provision of last year’s tax law is left untouched: