Pence, DeMint Push for Permanent Extension of Bush Tax Rates
(CNSNews.com) – Sen. Jim DeMint (R-S.C.) and Rep. Mike Pence (R-Ind.) renewed their call on Wednesday for making the current tax rates permanent before they automatically reset to 1990’s-era levels at year’s end.
DeMint and Pence highlighted legislation they introduced on Nov. 17, The Tax Relief Certainty Act, which would prevent income tax rates from resetting to the higher 1990’s-era levels, prevent the scheduled return of the estate tax, set capital gains tax rates at 15 percent, and permanently patch the Alternative Minimum Tax (AMT).
Both conservative lawmakers noted that raising taxes on any American during a recession was bad economic policy.
“Higher taxes aren’t going to get anybody hired,” Pence said. “Raising taxes on job creators won’t create any jobs. Raising taxes during the worst economy in 25 years is just a phenomenally bad idea.”
Pence said that anything less than a comprehensive tax package would create too much uncertainty for businesses still reeling from the 2008 financial and mortgage market collapse. That uncertainty, he warned, would only further retard job creation and economic growth.
“Uncertainty is the enemy of our prosperity,” Pence said. “Raising taxes in one month or one year or two years will create further uncertainty in our economy and it will stifle economic growth.”
DeMint also highlighted what he saw as economic uncertainty stemming from anything short of a full prevention of the scheduled tax increases.
“We don’t need a temporary economy, temporary jobs, and this idea of temporarily extending the tax rates is not going to help our economy,” DeMint said. “It’s not going to do what we need to do.”
DeMint and Pence both resisted suggestions of a compromise on the issue of whether or not to temporarily extend the current tax rates for those making over $250,000 per year. The idea of a temporary extension has been floated as a potential compromise between Republicans and Democrats and the White House, who favor allowing the rates on those Americans making over $250,000 to rise.
“Enough has not been said about a permanent extension,” DeMint said when asked if he was open to a compromise. “I’m convinced that the more money we leave in the private economy the better off government revenues are going to be. Bringing it [money] into the government is going to continue to waste money, as we’ve seen in the last few years.”
Pence said he believed that, given an up-or-down vote in Congress, his and DeMint’s legislation would pass. Pence added that should the current Democratic leadership allow such a vote, the public would support the bill as well.
“The legislation we introduced today, I believe, will meet with broad and majority approval of the American people and maybe even of members of Congress if it’s given a fair vote,” he said. “I really believe that the American people know that raising taxes in one month, or one year, or two years is a prescription for a continued struggling economy.”
DeMint, when asked how much his bill would cost, rejected the idea that not taking more money from working people represented a cost, saying that leaving money in the private sector did not cost the government.
“I don’t accept that this is a cost, to leave the money with the American people,” DeMint said. “We’re not cutting taxes. We’re leaving tax rates the same. The fact that we’re saying it costs the government to leave tax rates the same makes no sense.”
“Leaving the money in the private sector is not a cost,” he said. “Tax cuts are not a cost to government.”
DeMint and Pence’s bill would preserve the 10, 15, 25, 28, 33, and 35 percent income tax brackets, all of which are set to reset to 15, 28, 31, 36, and 38.6 percent respectively on January 1, 2011. (The 10 percent bracket would be eliminated if the tax cuts expire.)
Their bill also preserves the current 15 percent tax rate on capital gains – income earned from investments such as stocks or bonds – and would permanently eliminate the estate tax, which was phased out to zero.
Finally, the Pence and DeMint bill would permanently patch the AMT, which otherwise would force most middle class Americans to pay taxes at the top rate – a leftover from the 1960’s effort to keep the highest income earners from lowering their tax burden by reducing their income.
Normally, Congress passes a yearly AMT exemption. However, Pence and DeMint’s bill would make that extension a permanent fixture in the tax code.