Washington, D.C. – Rep. Kristi Noem today joined a bipartisan majority of her colleagues in voting to stop an historic tax increase scheduled to take effect at the end of 2012. By a vote of 256 to 171, the House approved a measure to extend current tax rates for all Americans for one year. The move is aimed at providing time for Congress to enact comprehensive, pro-growth tax reform in 2013.
“Raising taxes right now is the worst thing we could do to families and small businesses experiencing the worst economic recovery in modern history,” said Rep. Noem. “Hard-working taxpayers in South Dakota get up every day to pay the bills, take care of their families and put some extra money away for retirement or their kids’ education. I want to protect every South Dakotan from the largest tax increase in American history, and I hope the President and Senate Democrats will join us in taking action to keep tax rates low for all Americans.”
The expiring tax cuts are a part of a larger “fiscal cliff” the United States is facing at the end of the year. The fiscal cliff is the combination of the expiring 2001 and 2003 tax cuts, the massive spending cuts known as the sequester, tax increases that go into effect as a part of the President’s health care law, and other actions. According to the nonpartisan Congressional Budget Office, if Congress fails to take action on the fiscal cliff, America would likely slip back into a recession. Today’s vote makes the House the only body that has acted to avert both the sequester and the impending tax increase.
The need to provide certainty to hard-working taxpayers is critically important. In 2010, President Obama President Obama signed an extension of the 2001 and 2003 tax cuts, calling the action “tax relief that will protect the middle class, that will grow our economy, and will create jobs for the American people.”
The legislation provides a one-year extension of the low-tax policies originally enacted in 2001 and 2003 and then extended again in 2010. This extension serves as the bridge to tax reform in 2013 and would, among other things:
- Maintain existing tax rates and thus prevent a tax hike on January 1, 2013
- Continue marriage penalty relief
- Maintain the $1,000 child credit
- Maintain a 15% top rate on dividends and capital gains