Tax Cut Extension. In view of the looming \”fiscal cliff\” of expiring tax cuts, tax increases, and automatic spending cuts set to take place January 1, 2013, Sen. Harry Reid (D-Nev.) offered a bill (S. 3412) to extend the expiring Bush-era tax rates for one year only for individuals earning less than $200,000 or families earning less than $250,000. Prior to a vote on the bill, Sen. Orrin Hatch (RUtah) offered a substitute amendment to extend the Bush-era tax cuts for all income levels for one year. Hatch\’s substitute would also extend the current estate tax levels, with a 35-percent tax on estates worth more than $5 million. Without congressional action, this tax will jump next year to as high as 55 percent on estates worth more than $1 million.
The Senate rejected Hatch\’s substitute amendment on July 25, 2012 by a vote of 45 to 54 (Roll Call 183). We have assigned pluses to the yeas because extending the tax cuts keeps more money in the hands of citizens, where it can be invested into the economy, thus spurring economic growth. Of course, the deficits need to be eliminated, but the way to accomplish this is to cut spending, not increase taxes. (After the substitute amendment was rejected, the Senate passed Reid\’s bill to raise taxes for the \”rich.\”)
