Cornyn Cosponsors Bill to Prevent Largest Tax Hike in Nation's History

JOHN CORNYN United States Senator - Texas For Immediate Release	CONTACT: Kevin McLaughlin, (202) 224-0704 Charles Chamberlayne, (202) 224-0703 Tuesday, September 14, 2010

Cornyn Cosponsors Bill to Prevent Largest Tax Hike in Nation's History

Legislation Would Permanently Extend 2001 & 2003 Tax Cuts

WASHINGTON— U.S. Senator John Cornyn (R-Texas), a member of the Senate Finance Committee and Republican Leadership, has cosponsored legislation, The Tax Hike Prevention Act, introduced by Senate Republican Leader Mitch McConnell (R-Kentucky) that would permanently extend the 2001 & 2003 tax cuts at a time that unemployment remains high and job creation is stagnant.

"With millions of Americans facing the largest tax increase in the nation's history and many still trying to make ends meet, this bill will protect our families, seniors, and small businesses who are trying to weather this economic storm," said Senator Cornyn. "Raising taxes is the last thing we should be doing during a recession. If these tax cuts are not permanently extended Texans will send more of their hard-earned dollars to Washington, while small businesses, the backbone of our economy, will remain on the sidelines in the face of more economic uncertainty." 

Background:

The Tax Hike Prevention Act extends the 2001 and 2003 tax relief, permanently patches the Alternative Minimum Tax (AMT), and protects families from an increased death tax.

• The Tax Hike Prevention Act maintains current law on income tax rates. It preserves the 10, 15, 25, 28, 33, and 35 percent income tax brackets – rather than allowing the President to achieve his goal of a maximum official tax-rate bracket of 39.6 percent, punishing job creators and small businesses with higher taxes.
  
• The Tax Hike Prevention Act provides protection from the marriage penalty tax.  Married couples shouldn't be subject to higher taxes simply because they are married. Unfortunately, the income tax laws have penalized marriage in a number of ways over the years. The 2001 tax relief reduced this marriage penalty, and The Tax Hike Prevention Act continues that relief.
  
• The Tax Hike Prevention Act continues the $1,000 child tax credit. The bill would continue the progressive child tax credit at $1000 per child, rather than letting it fall to $500 per child.
  
• The Tax Hike Prevention Act protects 22 million Americans from the individual Alternative Minimum Tax (AMT).  The AMT is a sneak-attack tax that especially taxes families with children, as well as taxpayers in high-tax states.  The Tax Hike Prevention Act will significantly increase the AMT exemption amount, protecting 22 million Americans in 2010 – and beyond.
  
• The Tax Hike Prevention Act preserves current rates on savings and investment. Democrats in Congress are dangerously close to allowing the tax on dividends to more than double starting in 2011 – from the current 15 percent, to a maximum rate of 39.6 percent.  They also want capital gains to be taxed at a maximum of 20 percent, instead of the current 15 percent.
  
• The Tax Hike Prevention Act reforms the death tax. The bill includes a bipartisan proposal to reduce the death tax for small businesses and family farms.  It provides for a 35 percent death tax rate; a unified exemption amount of $5 million (per individual), indexed for inflation and a stepped-up basis for inherited assets. 
  

###

Senator Cornyn serves on the Finance, Judiciary, Agriculture and Budget Committees.  He serves as the top Republican on the Judiciary Committee's Immigration, Refugees and Border Security subcommittee. He served previously as Texas Attorney General, Texas Supreme Court Justice, and Bexar County District Judge.