Dec 05, 2011

Representative Walberg Supports Higher Taxes on Middle Class Families

Congressman Tim Walberg (MI-07) continues to push for ending the payroll tax cut even though economists estimate that blocking this middle class tax cut could cost 400,000 American jobs. According to a new Bloomberg story, Walberg claims that extending tax cuts for middle class families prevents Congress from getting the economy back on track.

“Congressman Tim Walberg is actually rooting for higher taxes on Michigan middle class families,” said Haley Morris of the Democratic Congressional Campaign Committee. “By protecting tax breaks for millionaires and billionaires instead of regular Michigan families, Congressman Walberg has shown where his values are. Congressman Walberg supports an extreme, out of touch agenda that ends Medicare, protects tax breaks for billionaires, and blocks job growth.”

Walberg voted to block a $1,800 middle income tax cut on average for 5.1 million Michigan families just last week. Congressman Walberg consistently pushes to protect tax breaks for millionaires and billionaires while ending Medicare for Michigan seniors. U.S. economist Mark Zandi also warned that blocking the payroll tax cut could prompt another economic recession.

BACKGROUND

Representative Tim Walberg voted against guaranteeing extending payroll tax relief. House Republicans, including Walberg, voted to bypass consideration of guaranteeing the extension of the payroll tax holiday beyond 2011. Without extension, payroll tax relief will expire at the end of the year. [H Res 477, Vote #870, 11/30/11]

The Typical Michigan Family Would Receive a $1,800 Tax Break. According to the Center for American Progress, the typical Michigan family would have received a payroll tax cut of $1,800 from the Senate’s bill, the Middle Class Tax Cut Act, which extended the payroll tax cut into 2012. [Center for American Progress, 11/30/11]

5.1 Million Workers in Michigan Will Receive a Tax Break. 5.1 million workers in Michigan will receive a tax break if the Payroll Tax Cut is passed by Congress. [Office of Tax Policy – Treasury Department, 11/30/11]

“Macroeconomic Advisers estimates that it would reduce GDP growth by 0.5 percent and cost the economy 400,000 jobs by the fourth quarter.” [Washington Post, 11/21/11]

Walberg Pledged to Protect Tax Breaks. Walberg signed the Americans for Tax Reform’s Taxpayer Protection Pledge, stating that he would oppose any net reduction or elimination of deductions and credits, unless matched dollar-for-dollar by further reducing tax rates. [Americans for Tax Reform Pledge Signers, accessed 12/02/11]

Reducing Payroll Taxes on Firms Creates More Jobs Than Tax Cuts for the Wealthy. In January 2010, the nonpartisan Congressional Budget Office wrote that reducing payroll taxes for firms was among the policies “that would have the largest effect on output and employment per dollar on budgetary cost in 2010 and 2011. By contrast, policies that would temporarily increase the after-tax income of people with relatively high income, such as an across-the-board reduction in income taxes […] would have a smaller effects because such tax cuts would probably not affect the recipients’ spending significantly.” [Congressional Budget Office, 1/10]

National Federation of Independent Business: Payroll Tax Holiday Can Create Jobs. The National Federation of Independent Business has said that a payroll tax holiday for small businesses would help “struggling businesses reduce costs” and “can reduce unemployment and keep people working during a period of slowed economic growth.” [NFIB, accessed 9/16/11]

Called the Payroll Tax Cut Extension a “Short Term Patch” and Equated It to a Distraction. According to Bloomberg, Walberg said of the Democratic proposal to impose a 3.25 percent surtax on millionaires to pay for an extension of the payroll tax cut, “the tax cut is a short-term patch that saves lawmakers from tackling the more fundamental fiscal problems the U.S. is facing.” [Bloomberg, 12/02/11]

Mark Zandi: Payroll Tax Cut Needed to Avoid Recession. “Failure to extend a payroll tax holiday into 2012 could trigger another recession, noted U.S. economist Mark Zandi said on Thursday, as Democrats called the extension a top priority needing quick action.” [Reuters, 10/6/11]

###

Want the latest updates? Follow the DCCC on Facebook and Twitter: