[Congressional Record (Bound Edition), Volume 158 (2012), Part 4]
[House]
[Pages 5415-5416]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      TAXMAGEDDON, JANUARY 1, 2013

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Florida (Mr. Stearns) for 5 minutes.
  Mr. STEARNS. Mr. Speaker, last week, April 17, was Tax Day, when all 
hardworking Americans must file their taxes with the Internal Revenue 
Service. Ironically enough, April 17 was also Tax Freedom Day, the day 
when Americans earn just about enough earned income to pay off the tax 
bill for all Federal, State, and local taxes. The first 111 days of the 
year, everything you and I, and all Americans earn went to fund the 
United States Federal Government, the same government that wasted 
$800,000 on a GSA conference with mind readers, commemorative coins, 
and bike building exercises, and the same government that thought 
giving half a billion dollars to Solyndra was a good idea.
  In 1900, Americans paid about 5.9 percent of their income in taxes, 
and Tax Freedom Day came about 22 days into the year. It is a far cry, 
my colleagues, from what we have to endure in taxes today.
  If you think 111 days to reach Tax Freedom Day is excessive, just 
wait till next year. We are on the cusp of a tax Armageddon. I like to 
call it a Taxmageddon. It's scheduled to hit on January 1, 2013. It 
will be the largest tax increase in memory, possibly ever, a $494 
billion tax increase in 1 year.
  When we talk about taxes, we usually project the increase or decrease 
in revenue over a 10-year budget horizon. But this $494 billion tax 
increase isn't over a 10-year budget window; it is an immediate massive 
tax increase in 1 year.
  Where do these tax increases come from? There are a number of tax 
provisions that are set to expire at the end of this year. Unless 
action is taken to extend these provisions or make them permanent, it 
will lead to an unheard of tax increase in January.
  About one-third of the tax increases will come from the expiration of 
the Bush tax cuts from 2001 and 2003. These tax cuts reduced the 
marginal rates for all Americans and expanded the child tax credit, 
reduced the marriage penalty, and increased the tax breaks for 
education costs. The majority of the tax benefits in these tax cuts 
were targeted towards the middle and lower income tax folks.
  About a quarter of the tax increases will come from the expiration of 
temporary payroll tax cuts that were created just 2 years ago.

[[Page 5416]]

  Another quarter of the tax increases will come from the expiration of 
the alternative minimum tax. With all of this talk about creating the 
Buffett rule, the President seems to forget that we already have the 
Buffett rule in the AMT. The AMT was created in 1969 to ensure that 155 
high-income households paying zero Federal income taxes would pay 
income taxes. Unfortunately, it was never indexed to inflation. So more 
and more Americans become entangled in the AMT, and today the AMT 
threatens to hit most Americans in the middle class and is regularly 
patched to protect taxpayers, but never repealed. Unless it is dealt 
with, it will impact millions of middle class taxpayers.
  In 2013, we get a brand new tax, courtesy of ObamaCare. There will be 
a 3.8 percent tax on wages and salaries over $250,000 and investment 
income over that same amount. While this seems like it won't affect 
most people, this tax can apply to unearned income, like capital gains 
from selling your home, which will affect middle class families when 
they sell property. Like the AMT tax penalty, this tax is not indexed 
to inflation, which means that more and more Americans will be affected 
by this tax over time.
  We'll also see the return of the Death Tax to its pre-Bush levels, 
when the maximum rate can be 55 percent of your estate. I believe there 
should be no taxation without respiration; that is, you have to be 
breathing. It is wrong to tax a business or a family farm when it's 
transferred from parent to child. This tax has hurt family farms and 
family businesses where children have been forced to sell the business 
or farm because they could not afford to pay the Death Tax.
  Federal Reserve Chairman Ben Bernanke has referred to all these 
expiring tax provisions as a ``massive fiscal cliff.''
  When we talk about taxes, we usually project the increases over 10 
years, but this is going to be immediate in the year 2013, January 1.
  There has been a failure of leadership from the White House. The 
President's budget is full of election-year gimmicks and unwillingness 
to try to address the upcoming Taxmageddon. Instead, the President 
doubles-down on his election year rhetoric, he doesn't address expiring 
taxes, and instead proposes a slew of new taxes on American companies.
  You do not raise taxes during a recession. Raising taxes will halt 
what little economic growth we had over the last 3 years and return us 
to the days of double-digit unemployment.

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