House Democratic Leaders Decline Comment on Senate Tax Chair's Plan to Raise Taxes

April 1, 2009 - 5:34 PM
Three Democratic leaders in the House of Representatives declined to say Tuesday whether they would back a Senate tax bill that preserves most of the Bush tax cuts for middle-class Americans but would also increase taxes on people who make $104,425 or more a year.

House Financial Services Chairman Barney Frank (D-Mass.) (AP Photo)

(CNSNews.com) – Three Democratic leaders in the House of Representatives declined to say Tuesday whether they would want to vote on a Senate tax bill that would preserve most of the Bush tax cuts for middle-class Americans but would also, by raising the two top tax rates, increase taxes on people who make as little as $104,425 a year.
 
Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, introduced his tax plan last week. His plan would fulfill many of the tax changes advocated by President Barack Obama.
 
When asked whether they would like to eventually have a vote on the proposal, however, House Majority Leader Steny Hoyer (D-Md.), House Ways and Means Chairman Charles Rangel (D-N.Y.), and House Financial Services Chairman Barney Frank (D-Mass.) declined to comment.
 
Meanwhile, Baucus defended his plan against Republican claims that a recession is the wrong time to raise taxes on any American, regardless of a person’s income.
 
The Baucus plan would raise the rates on the top two income brackets from the current levels of 33 percent and 35 percent, respectively, to 36 percent and 39.6 percent. The new rates would become effective after 2010. The rate increases would affect all income-earners who fall into those two brackets regardless of their filing status.
 
That means some taxpayers earning as little as $104,425—far less than half the $250,000 threshold President Obama set for raising income taxes—would see their income tax rate increased.

House Ways and Means Chairman Charles Rangel (D-N.Y.) (AP Photo)

For example, according to the Internal Revenue Service, the second highest income bracket—currently set at 33 percent—kicks in at an income level of $104,425 for a married person filing separately; $171,550 for someone filing as a single person; $190,200 for someone filing as a head of household; and $208,850 for a married couple filing jointly. 
 
Under Baucus’s proposal, the tax rates for all these people would jump to 36 percent.
 
The highest income bracket—currently 35 percent—kicks in at an income level of $186,475 for a married person filing separately; and $372,950 for all other filing statuses.

When asked whether he would like to see a vote on the Baucus bill in the House, Hoyer told CNSNews.com: “I am going to leave that up to Mr. Rangel. But I am not going to anticipate that yet.”

Hoyer, along with House Speaker Nancy Pelosi (D-Calif.), controls the legislative schedule for the House floor.

But Rangel, whose committee directs spending and taxation in the Congress, declined to answer whether he would try to send the bill through his committee this year for a floor vote when asked by CNSNews.com.

Frank, who chairs the House Financial Services Committee, also declined to offer an opinion of the bill.

“I am focused on my committee business,” Frank told CNSNews.com. “I can’t respond to you.”

Rep. Scott Garrett (R-N.J.), however, who serves on both the House Committee on the Budget and the House Financial Services Committee, said that he is against the Baucus bill in general, and especially while the economy is in recession.

“Either way it’s not good for the economy,” Garrett told CNSNews.com. “The problem with Obama’s original schedule of pushing off the effective taxes increases a year or so down the road was that it is a naïve idea that business and  individuals don’t plan their lives looking prospectively, which of course they do.

“Likewise, it’s even worse to have an effective tax increase now, which is, as I understand it, is what this bill would do because we are obviously in recession or worse right now,” said Garrett. “That would just undercut any of the other positive steps the Obama administration might be considering, or doing, to try to get the economy revived.

“No one has ever been able to explain to me how you get the economy moving again by taking money out of the public’s pocket,” said Garrett.

But Baucus defended his bill by focusing on the point that it preserves the Bush tax cuts for middle-class Americans.

“Raise” taxes? asked Baucus. “We are lowering. We are maintaining tax cuts. All I know is it makes good sense to preserve the middle-income tax cuts. I think Americans want those preserved, not increased. My bill preserves the middle class tax cuts.”
 
CNSNews.com Correspondent Matt Cover contributed to this report. 

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