American Taxpayer Relief Act of 2012by Representative Edward R. Royce
Posted on 2013-01-01
ROYCE. Mr. Speaker, I think what gets lost in the 30-second sound
bites on the fiscal cliff is the real cliff facing this country in the
form of a massive wave of entitlement obligations.
Government accounting doesn't tell the whole story. The actual liabilities of the Federal Government, the present value of Medicare, Medicaid, and Social Security programs already exceed $86 trillion. By 2040, our entitlement obligations will consume all of the average postwar projected tax revenue. We have to come to grips with that.
That means every dollar collected by the IRS would go to pay Social Security, Medicare, or Medicaid, without reforms. We will have to go out and borrow to pay for other spending should that happen. It is unfortunate that the President wasn't willing to engage on this front, and it is unfortunate that the Senate leader continues to deny the crisis.
On the day of new year's resolutions, let's hope Senator Reid and President Obama resolve to be honest about the crisis our Nation faces with the coming wave of entitlement obligations, making these programs solvent, and reining in these trillion dollar deficits, which every economist will tell you is unsustainable. This must be done in 2013.
Without the legislation before us today, without this bill, millions of Americans would see their tax rates go up, and that would provide a systemic shock to our already weak economy. This plan that we're about to vote on locks in a reduced tax rate for middle class families who otherwise would have seen $3,000 in higher taxes on average. It permanently holds down the death tax, which impacts so many small businesses. It permanently protects the middle class from the alternative minimum tax, and it adjusts that for inflation.
The plan does away with a new entitlement program created in ObamaCare, and it makes permanent a 15 percent capital gains and dividends rate for income up to $400,000 for singles, $450,000 for married couples, and a 20 percent rate for those above. That rate would have gone to 39.6 percent for dividends. That would have been very injurious for our capital markets. That would be very injurious for economic growth if we allowed that to happen.
Tax relief has been achieved. Now is the time for the President to work with Congress to address government overspending, the underlying problem.