Friday, October 15, 2010

Open Letter to Senator Hatch

Dear Senator Hatch,

Recently there has been a lot of talk about extending the Bush tax cuts. I think for the most part Republican legislators want the tax cuts extended at all levels. The President has come out in support of extending the tax cuts for everyone's first $250,000 of income and allowing the top two tax brackets to return to 2001 levels.

Senator Hatch are you in favor of extending the Bush tax cuts to everyone for only their first $250,000 of income? You mentioned a frustration that politics is getting in the way of extending the tax cuts via your twitter feed. The most reasonable and best plan I've heard at this point is to extend the tax cuts to only the four lower tax brackets. Households' whose marginal tax bracket is one of the bottom four tax brackets constitutes 98% of American households. What good reason is there for not extending the tax cuts to them?

They are the ones that are most impacted by the difficult economy. They are the ones who've been struggling the most. They are the ones who've been losing share of income over the last several years. They are the ones who deserve a little bit of help. They are the ones who with the extra money are most likely to use it in ways that can help get the economy humming again. They are the ones who you ought to be concerned about most.

The arguments about small business getting hit with large tax increases are over stated. Less than 3% of small businesses reach the fifth tax bracket. And even if they do only their income over $250,000 (after expenses) would be taxed at a slight increase of about 7.5%.

The argument that the economy needs the tax cuts seems like a good one. The tax cut extension will be most useful for the lower and middle classes. The top the 1-2% of Americans are the ones who by far received the largest tax breaks in 2001 and 2003. They are the ones whose incomes have been growing the most. They are the ones who are least likely to spend a small tax break on consumer goods. They are the ones who don't need that help. Consumer spending is the biggest driver of our economy. Lower and middle class Americans have the biggest impact here.

Extending the tax cuts to all tax brackets seems unwise. Many from the right have complained about government spending especially since the past election. Why would you compound the deficit issue? Clearly cutting off revenues does not stop congress from spending more.

If you are upset about politics preventing a tax extension from passing then step up Mr. Hatch and tell the senate that you will work on getting the tax cuts extended for the bottom four tax brackets. They only need one senator from the right to get this moving. One brave man willing to stand up for what is right. I understand the dilemma you must be facing considering a good portion of your donors are likely from the top 2% group. Please don’t forget you represent 100% of us not just 2%.

2001 Tax Rates

2010 Tax Rates

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