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WASHINGTON, D.C. – Today, U.S. Senator John Barrasso (R-Wyo.) expressed his opposition to Democratic proposals that will increase the Alternative Minimum Tax (AMT) and death tax.
Excerpts of his remarks are below:
“We're now beyond the point, four weeks after the election and now four weeks until the date of the fiscal cliff, and as Republicans have been pointing out on this floor, Congress must act soon to take on the numerous expiring tax provisions and the sequester.
“And I believe President Obama must provide leadership in those efforts. I've seen very little so far.
“The tax increases that President Obama is now trying to push through will really do almost nothing to reduce our national deficit and nothing to reduce our national debt.
“The White House and Democrats in the Senate are focused only on tax hikes while they continue ignoring the real drivers of our debt, which is the out-of-control entitlement programs—social security, Medicare, and Medicaid.
“Until we find a way to do meaningful entitlement reform, no amount of tax revenue will be able to match the increase in entitlement spending.
“The President and the Democrats in Congress are willing to go over the fiscal cliff in order to get those tax hikes. Rather than negotiate in good faith, they're willing to try to spend their time trying to convince the American people that it's just someone else's fault.
“Going over the fiscal cliff will mean another recession, and this one is squarely on the shoulders of President Obama. It will mean unemployment spiking back up over 9%.
“It will also mean a whole host of tax increases, even beyond the higher tax rates that Washington Democrats want so badly.
“Americans are also facing big increases in the death tax and the Alternative Minimum Tax, also known as the AMT. Both of these taxes will go up January 1st unless Democrats work with Republicans and take action to stop the increases that are already scheduled to occur.
“There is bipartisan agreement that these taxes will do great damage to middle-class families, to family businesses, and to family farms. Any effort to stop these harmful tax increases is being held up by the President's insistence on raising tax rates.
“Now, let's take a look at the death tax. Today this tax, also known as the estate tax, is set up at a top rate of 35%, with an exception for the first $5.1 million of the estate's value. Well, those are the levels that Congress set and the President agreed to in 2010.
“Those levels are now set to jump dramatically to a top rate of 55% with an exemption for just the first $1 million.
“$1 million sounds like a lot of money until you start looking at family farms. Farmers have a lot of assets such as land, buildings and livestock. Those things are worth a lot of money for purposes of calculating the value of someone's estate. But they aren't liquid assets. You can't just spend a tractor.
“Once a mom or dad dies in the farm family, the I.R.S. wants the death tax paid within nine months. The taxes collected—though it is calculated on the big valuations for the farm or ranch property, it has to be paid in cash.
“Often the only way for the family to pay the tax is for the family to sell off the farm. Families are forced to make life-changing decisions regarding their future. They have to sell land or livestock at a time when prices are low because the tax bill is due immediately.
“If we don't act in Congress, this tax is going to hit more family farms and it will hit them much harder, taking a much larger portion of the farm just to pay the taxes.
“The same thing holds true of other small family businesses—the neighborhood restaurant, the grocery store on the corner, businesses that may have assets but aren't easily turned into cash to pay a tax bill.
“Most of the businesses we have in Wyoming are small businesses, the dry cleaner, florist, car wash. A lot may have been in the family for a couple of generations and they want to pass it down to the next generation.
“When Washington comes looking to take its 55% cut, which is what's going to happen come January 1, those businesses are going to be forced to sell off assets or maybe even just sell out entirely.
“If these death tax increases go into effect, a lot of the sons and daughters are not going to be able to keep the family business that their parents worked so hard to build and pass along.
“Democrats and Republicans agree this would be a terrible blow to a family farm or to a small family business.
“And just the uncertainty about what's going to happen next year under the death tax is very stressful for many families across the country who are running their own small businesses and their own small farms or ranches.
“At the very least, we should extend the current limits worked out in the 2010 compromise.
Alternative Minimum Tax (AMT)
“The other tax increase that is set to hit American families very hard very soon is the Alternative Minimum Tax.
“You recall, that the AMT Tax was created in 1969, and they did that when someone discovered that there were 155 people all across the country, only 155 people who actually had made a lot of money but they didn't pay any taxes on it. And we know why.
“It was because of various tax loopholes. Congress could have done something to close those loopholes, but instead Congress created a whole separate tax scheme.
“Then to make matters worse, they didn't index the income limits for inflation. So Congress comes along every year and acts a patch to keep the tax from hitting the middle class. The problem is it still has done nothing to patch the AMT for this year.
“If we don't do something soon, the A.M.T. will hit an additional 28 million taxpayers this year for a total of $92 billion. That's the extra tax American families face when they file their 2012 taxes by April 15th of next year.
“These aren't the privileged few who are taking advantage of special loopholes that the tax was intended to catch. These are 28 million taxpayers who normally never have to deal with the AMT.
“Again, there is bipartisan agreement that we need to enact this patch, but it's being held up as part of the fiscal cliff negotiations.
“The President has made his offer. He wants to increase taxes, add more stimulus spending, ignore the entitlement spending that is the true driver of our debt, and hold campaign-style rallies around the country to try to convince people it's not his fault if we go over the fiscal cliff.
“President, the election is over. It's time for him to stop campaigning and to start leading. This means giving up his stubborn insistence on raising tax rates and instead focusing on raising revenue through tax reform and economic growth.
“It means doing something on these fundamental issues of tax policy that both sides agree on. That way, American families won't get hit with these massive tax increases.”