Djou: Democrats Are Pushing Largest Tax Increase in History
Republican Congressman Charles Djou says Democrats should not be making moves to take your money.
In an with Fox News’s Neil Cavuto Sept. 21, Djou said: “There’s no reason we should be pushing through the largest tax increase in American history right now.” (Djou’s comments start at 1:07.)
By “we,” Djou was referring to Congress — namely, the Democrats running the show.
So is it true that they’re pushing for a tax increase?
Nope. This is just an example of some good old fashioned politicin’.
During the tenure of Republican President George W. Bush, two major pieces of tax legislation were passed. The first was the and the second was the .
Basically, the two bills cut taxes across the board and made some other changes to the tax code. Specifically, the Economic Growth and Tax Relief Reconciliation Act of 2001
required that all tax brackets be reduced by 2006. Under the bill, the 15 percent bracket went to 10 percent, 28 percent dropped to 25 percent, 31 percent to 28 percent, 36 percent to 33 percent and 39.6 percent to 35 percent. Several other changes and reductions were introduced, such as new capital gains tax rates and a child tax credit, which doubled from $500 per child to $1000 per child.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 sped up the process of reducing the tax rates, having them take immediate effect for 2003 income tax returns.
A major compromise that legislators agreed upon when signing the Bush tax cuts, though, was a “sunset provision.” The provision says that if after Dec. 31, 2010, Congress does not vote to extend the cuts, all of the taxes will revert back to pre-2001 levels.
And here we have the fundamental reason that Djou’s claim is not valid.
Democrats aren’t “pushing” through anything. In fact, if the Democratic party decided to let all of the tax cuts revert back to the 2000 levels (and that’s a big if), they would need to do nothing. The reason being that the tax legislation – signed into law by a Republican president and a Republican-controlled Congress – agreed that its lifespan would only carry it to the end of 2010.
And to be completely fair to Democrats, the party isn’t suggesting a total elimination of the tax reductions. President Barack Obama has asked Congress to keep the tax rates except for individuals earning more than $200,000 and couples earning more than $250,000.
So, if the tax cuts are allowed to expire, would it be a major tax increase for at least certain segments of society, i.e., the “wealthy”?
Yes.
Could Democrats take an active role in extending the tax cuts for all income levels if they chose to?
Yes.
But are Democrats pushing a tax increase through Congress, as Djou says?
No. They are not.
