 |
| The Tax Overpayment |
April 11, 2001 |
| |
Dear Friends,
Have you ever accidentally paid too much for your monthly utility bill? It`s nice to get the next month`s statement with "credit" noted at the bottom, isn`t it?
The federal government doesn`t work that way. Americans are paying more to the federal government than we are spending on government services. But you won`t get a "credit" statement for the tax forms you`re trying to wade through this month. To reduce the amount you are sending to Washington requires a change to our tax laws. We`re working on it.
We balanced the budget without touching social security for the first time in over 30 years in 1999. We also started paying off the public debt that year and over the last two years we have paid off $354 billion in public debt. This year, we will pay off another $250 billion. We`re on track to pay off all of it that is possible to do by 2007. The rest is in long term bonds that haven`t come due. As a result, our interest payments are going down each year.
But there is still more money coming in to the government than we need to operate. We know we have some priorities that we need to fund -- like
education and national defense. But there is plenty of room for New Mexicans to keep more of what you earn. A combination of debt reduction, tax relief and investing in people through education is the best way to keep the ecomony
growing.
Tax bills start in the House of Representatives and, in the first 100 days of this Congress, we got a good start.
We started out with reductions in tax rates for everyone. The bill phases in over 10 years but is retroactive to the start of 2001. The 15% bracket on the first $12,000 of income would go down to 12% in 2001 and eventually down to 10%. Over the next ten years, tax brackets would be consolidated and reduced so that no American pays more than one third of their income in taxes
to the federal government. We go from five tax brackets (15, 28, 31, 36 and 39.6 percent) to four (10, 15, 25 and 33 percent).
The next step was Marriage penalty relief and expanding the children`s tax credit. On average, married couples pay $1400 more a year in taxes just because they are married. We passed a bill in the House that would end the marriage penalty and expand the children`s tax credit from $500 to $1000 a year per child.
As a result, 1 in 5 taxpaying families with children will no longer pay any income tax at all – completely removing 6 million American families from the tax rolls. A family of four in New Mexico making $35,000 a year would no
longer pay any federal income taxes. A family of four in New Mexico making $50,000 a year will receive a 50% tax cut – keeping at least $1,600 a year. And if you are fortunate enough to earn $75,000 a year, a family of four in New Mexico would receive a 25% tax cut.
Finally, before coming home for our Easter work period, the House passed the phase out of the death tax. Did you know that 99% of the farms and ranches in America are owned by individuals, family partnerships and family corporations and one half of America`s farmers are over 55 years old?
Farmers, ranchers and small business owners pay taxes all their lives -- on their income, their employees, their property and their corporate income. The death tax forces about one third of small businesses to sell or liquidate property to pay the taxes when the owner dies, losing, on average, 30 jobs every time it happens. The death tax can be 55% of the value of the ranch or
business for the estate. But if you lose your job when the boss dies, the death tax is 100% for you.
We`ve made a good start on keeping our committment to tax relief for American families. That`s the next best thing to marking "credit" on your Form 1040.
I`ll be working in New Mexico for the next two weeks. Check our events calendar and come on by. Would love to see you.
Good to be home,
Heather |
|
|
|