The tax dollars Americans pay every April 15 go to fund vital priorities for our country, from Social Security to homeland security. But America’s middle class needs dollars in their own pockets to pay for vital priorities, too – such as housing, educational expenses, heat, groceries, and health care. While congressional Republicans have shifted the tax burden to the middle class by insisting on massive tax cuts for the wealthy and corporations (Economic Policy Institute, 4/9/08), Democrats are fighting for smart, targeted tax relief for hard-working, middle-class Americans. (See DPC document entitled Myth vs. Reality: Bush Republican Tax Cuts)
Specifically, in the Fiscal Year 2009 Budget Resolution (S.Con.Res.70), provides for AMT relief for the middle class. In addition, Senator Baucus, the Chairman of the Senate Committee on Finance, led an effort to use surplus funds in the Senate budget to provide tax cuts to every American taxpayer. This Democratic initiative, which was approved by a broad bipartisan consensus, includes extensions of tax cuts for America’s working families, a standard deduction for property taxpayers, and tax relief for military men and women.
Just three of these tax cuts (extension of the ten percent tax bracket, marriage penalty relief, and child tax credit) would put approximately $2,209 in tax savings back in the pockets of the hardworking American families.
Democratic Budget Provides $340 Billion in Middle Class Tax Relief
Source: Senate Committee on Finance.
For more information, see the DPC reports entitled, S.Con.Res.70, the Fiscal Year 2009 Budget Resolution and The Democratic Budget: Strengthening the Economy and the American Middle Class.
AMT Relief for the Middle-Class
Democrats are committed to taking steps to prevent the spread of the Alternative Minimum Tax (AMT) so that it does not impose higher taxes on middle-class families. The Democratic Budget provides AMT relief for 2008, as the President requested.
Democrats agree with the President that "the longer term solution to the problems associated with the individual AMT is best addressed within the context of other reforms to the tax system." Such reforms, as the Administration acknowledges, should be revenue neutral to avoid further burdening future generations. Under the resolution, the number of taxpayers subject to the AMT would not be allowed to increase – protecting more than 21 million taxpayers from being subjected to the AMT in 2008.
Extension of Tax Cuts for America’s Working Families
Democrats intend to extend a number of provisions aimed directly at America’s working families that expire at the end of 2010, including: