(WASHINGTON,
D.C.) – U.S. Senator Patty Murray today released the following statement on the
Senate vote to extend tax cuts. Murray, who voted twice this month for
more responsible tax packages to extend middle class tax cuts, today voted to
move forward with a compromise package that extends current tax rates for two
years. The package, which passed the Senate today, extends important tax
cuts for middle class Washington state families, includes an extension of our
state sales tax deduction and extends unemployment insurance for 13 months for
out of work Washington state workers.
What
these tax cuts mean for Washington state families and their paychecks
“I
am disappointed that the only way to protect middle class families from a tax
hike in January was to support an extension of all the Bush tax
cuts. That’s why I voted twice in the past month to extend tax cuts
for our middle class families who have been hurt most by our economic
downturn. I am angry that Republicans played political games and
held the middle class hostage to secure tax cuts for the wealthiest Americans.
“The
Republican game plan is simply irresponsible. Extending benefits to those
who need them least and adding to our debt is wrong. But I also
could not sit back and allow taxes to be raised on Washington state families
who are just struggling to get by.
“In
the end, this bill will allow hard working Americans who are stretching every
dollar in these tough times to keep more of their hard earned money. And
it prevents Republicans from cutting off unemployment benefits to those who are
fighting to get back to work, stay in their homes and put food on the table
during this holiday season.
The
bill also contains an extension of the state sales tax deduction, which I have
championed for years, and gives Washington state residents the tax fairness we
deserve.
“Unfortunately,
protecting the vast majority of Washington families came with an unnecessary
and irresponsible provision for a very few Americans who aren’t facing those
same hardships.
“There
is absolutely no question that extending tax cuts for the wealthiest Americans
is a wasteful and irresponsible portion of this compromise. Getting our
economy back on track and our fiscal house in order simultaneously means that
we have to make smart investments. Adding to the debt by indiscriminately giving tax breaks to wealthy Americans is a not a
smart investment.
“But
the reality is that too much is on the line for average families to allow
partisan gridlock in Washington D.C. to once again endanger the livelihoods of
millions in Washington state.
“I
hear from unemployed workers everyday who tell me stories about being days or
weeks away from losing their homes, I know that during a recession the last
thing workers can afford is smaller paychecks, and now is no time to cut back
on the economic support tax cuts provide for our small businesses.
“If
we allowed political games to derail the help middle class families need, we
would be failing the people that are depending on us to work together to get
our economy back on track.
“I
hope that those who will benefit the most from these tax cuts use them to help
the most vulnerable, improve our communities, and invest back in our
economy. And it’s time for Republicans who spend election cycles talking
about cutting our debt to do more than pander – and to join Democrats in the
serious work of getting our economy back on track.”
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Middle-Class Tax Relief Package – What it Means for
Washington State Families and their Paychecks
Without
this agreement a typical working Washington state family would have seen their
taxes go up beginning on January 1, 2011 by thousands of dollars at a time when
they can least afford it. This bill provides immediate and badly needed help
for these families and small businesses through a variety of tax saving
measures aimed at working class Washington families.
See more detailed
information on all of the provisions in this bill.
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Middle
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- Extends Middle Class tax relief: This bill
extend tax relief of
more than $3,000 for a typical working family. - Payroll Tax Cut: Creates a payroll tax cut that
is worth $1,160 for the average Washington state household ($58,000 in average
income). - Alternative Minimum Tax relief: Extends for two
years AMT relief which will protect thousands of Washingtonians from an
additional tax bill of up to $5,600. - State Sales Tax Deductibility: Extends for two
years sales tax deductibility for Washington state families. This extension
provides tax fairness for Washington families, an economic boost for
businesses, and puts money back in the pockets of our state’s taxpayers. - Higher Education Tax Credit: Extends the
American Opportunity Tax Credit, a partially refundable tax credit worth up to
$2,500 that helps students and their families cover the cost of tuition. Over
150,000 Washington state individuals claimed this tax credit in Tax Year 2009.
Washingtonians on average saved $1,760 each using this credit to help pay for
school. - Marriage Penalty: The proposal extends marriage
penalty relief for two years. This will prevent some Washington state couples
whose taxable income is in the same range from paying higher taxes.
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Help
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- Unemployment insurance: Includes a 13
month reauthorization of federal support for 99 weeks of unemployment insurance
for laid off workers — a policy that most economists agree is one of the
most effective measures to spur our economy. There are over 260,000 Washington
workers that are currently receiving unemployment. - Earned Income
Tax Credit: The bill includes a
continuation of the Earned Income Tax Credit providing up to $630 for
Washington state families with 3 or more children. Nearly 400,000 Washington
families utilized the Earned Income Tax Credit in Tax Year 2008. - Child Tax
Credit: The $1,000 child tax credit
will be extended for two years with the $3,000 refundability threshold
established in the Recovery Act. This extension will ensure an ongoing tax cut
to lower income families with children throughout Washington state. 559,000
Washington state families utilized the Child Tax Credit in Tax Year 2008.
Help for Small Businesses
- Tax Cuts for
Business Investment: Creates the
largest temporary investment incentive in American history by allowing
businesses to expense all of their qualified investments in 2011.
Estimates from the Treasury Department indicate this could generate more than
$50 billion in additional investment nationwide next year. - Research and Development Tax Credit: Extends for 2
years research and development incentivizes companies use to create jobs by
giving them a tax credit for qualified research spending. The R&D tax
credit is truly a jobs credit with 70% or more of the credit attributable to salaries
and wages of U.S. workers performing research in the United States. - 15 Year Depreciation for Restaurant and Retail
Improvements:
Extends for 2 years a provision that incentivizes restaurants to upgrade by
allowing them to write off the costs faster. - Credits for
Hiring Military Personnel: The bill
extends for two years the provision that provides eligible small business
employers with a credit against the taxpayer’s income tax liability for a
taxable year in an amount equal to 20 percent of the sum of differential wage
payments to activated military reservists. There are approximately 28,000
National Guard and Reservists in Washington state according to the Washington
State Department of Veterans’ Affairs.
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Experience of Hypothetical Washington
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The following are approximate tax
savings for hypothetical Washington state families and individuals across
Washington state. The calculations do not include itemized expenses and other
credits that would further reduce a family’s tax burden. They are intended to
give a broad measure of the savings this bill provides. Calculate other
scenarios.
Everett, Washington: A married
couple – an Aerospace Engineering and Operation Technician (mean annual salary
in Washington state of $60,340) and a waiter/waitress (mean annual salary in
Washington state $28,590) with two young children.
Estimated Federal Tax Burden:
If tax cuts were to expire on January, 1st 2011: $16,363
Under this bill: $11,554
Savings of: $4,809
Tacoma, Washington: A single
mother working as a Home Health Aide (mean annual salary in Washington state of
$23,010) with two young children.
Estimated Federal Tax Burden:
If tax cuts were to expire on January, 1st 2011: – $2,021
Under this bill: – $4,140
Savings of: $2,119
Vancouver, Washington: A married
couple – a Computer Software Engineer (mean annual salary in Washington state
of $99,080) and a Middle School Teacher (mean annual salary in Washington state
of $56,790) with three children – one of which is a junior in college.
Estimated Federal Tax Burden:
If tax cuts were to expire on January, 1st 2011: $40,191
Under this bill: $32,499
Savings of: $7,692
Spokane, Washington: A single,
Administrative Assistant (mean annual salary in Washington state $47,890 –
approximate average salary of all Washington state workers)
Estimated Federal Tax Burden:
If tax cuts were to expire on January, 1st 2011: $9,928
Under this bill: $8,428
Savings of: $1,500
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