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High taxes place burdens on working families and small businesses. Mike has supported numerous measures that would increase fairness and reduce the tax burden on hard-working Mainers, including exemptions from the estate tax for small businesses and family farms. Mike has also supported permanent increases in the child tax credit, ending the marriage penalty, an acceleration of certain income tax reductions, an expansion of the 10% bracket, and increased expensing and bonus depreciation for businesses to encourage greater investment.
FISCALLY RESPONSIBLE TAX RELIEF
On December 2nd, Mike voted to pass H.R. 4853, the Middle Class Tax Relief Act, which would extend tax relief to all American taxpayers. The bill would permanently extends the 2001 and 2003 income, capital gains and dividend tax rates for all up to $200,000 for individuals and $250,000 for couples. The bill also permanently extends small business expensing, marriage penalty relief (including EITC) and the $1,000 child tax credit. In addition, the measure would have protected more than 25 million taxpayers from the alternative minimum tax (AMT) by extending the AMT patch through 2011.
Despite House passage, the Senate did not take up the measure and instead added tax breaks for millionaires and billionaires and other unrelated provisions, which ended up adding nearly $1 trillion to the already out of control national debt. The final bill also put the future of the Social Security system in jeopardy, and shortchanged Maine’s public employees. Mike continues to believe that tax relief should be focused on hardworking families and small businesses, not the wealthiest Americans and major oil companies.
TAX RELIEF FOR SMALL BUSINESSES
The President has highlighted simplifying our tax code as a priority, and Mike strongly supports these efforts. Too many individuals and small businesses lose money and economic growth opportunities because of our overly complicated tax code. Mike will continue to work to balance the budget while responsibly reducing taxes.
Most recently, Mike supported H.R. 5297, the Small Business Jobs Act, which was signed into law on September 27th, 2010. The bill expands much needed lending to millions of small businesses and offers tax incentives to help small businesses grow, hire, and fuel our economy. The bill leverages up to $300 billion in private sector lending for small businesses, along with state grants for small business lending. It also expands small business access to private capital to finance an expansion and hire new workers. In addition, it gives small businesses $12 billion in tax cuts to spur investment, growth, new starts and hiring by:
- doubling and enhancing small business expensing and extending bonus depreciation
- allowing for 100% exclusion of capital gains on investments in small business
- doubling the deduction for start-up expenditures
- allowing self-employed taxpayers to deduct health costs for payroll tax purposes
EXTENDING TAX RELIEF FOR R&D, TEACHERS, STUDENTS, AND ECONOMIC DEVELOPMENT
In 2009, Mike voted to pass the Tax Extenders Act, which became law the next year. This bill extended a number of important tax provisions, including tax credits that promote research and development and investments in alternative fuels. The bill also extends the deductibility of state and local sales taxes and property tax relief, as well as the college tuition deduction and the deduction for classroom expenses for teachers.
One provision in the bill that extended tax incentives for Empowerment Zones directly benefitted the Aroostook County Empowerment Zone. These tax incentives provide businesses in the Aroostook Empowerment Zone with wage tax credits for the coming year. An employer can receive up to a $3,000 wage credit per employee for employees who work and live in the Zone. They also can receive accelerated depreciation expenses on items such as business equipment.
SUPPORTING OUR TEACHERS AND PROMOTING HIGHER EDUCATION
According to a 2010 National School Supply and Equipment Association Retail Awareness Study, teachers spent a total of $3.5 billion of their own money on supplies for their classrooms during the 2009-10 school year. This breaks down to an average of $936 per teacher for both supplies and additional instruction materials. As education budgets continue to face major shortfalls, that amount is only expected to increase. That’s why Mike supports legislation to increase and extend the teacher tax deduction in order to help teachers close this gap.
PERMANENT ESTATE TAX RELIEF FOR FAMILIES, FARMERS, AND SMALL BUSINESSES
Mike supports exemptions from the estate tax for small businesses and family farms. Mike voted for legislation in the 111th Congress that maintained estate tax relief. The bill ensured that 99.8 percent of estates in America never pay a dime of taxes and offered certainty and stability for farmers and small businesses. However, the Senate did not act on the bill and it never became law. It is critical that Congress pass a long term solution to the estate tax so that families and businesses can plan for the future. It is simply not fair to change these kinds of major tax policies from year to year.
TAX RELIEF IN THE RECOVERY ACT
The Recovery Act provided 99 percent of working families and individuals in Maine a tax cut. Workers in Maine received approximately $995 from these tax breaks. The Recovery Act provided this crucial tax relief for working individuals and families when they were most in need during the tough economic climate.
The Recovery Act also provided tax breaks to support small business growth, including tax credits for increased hiring and renewable energy and tax deductions for capital investments. Click here to see how Mainers have benefitted from tax relief in the Recovery Act.