Taxes

Progress

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides vital tax relief and investments in our workers that will create jobs and accelerate economic growth. The law:

• Extends middle class tax cuts to prevent a typical working family from facing a tax increase of over $2,000 on January 1


• Provides a 2% payroll tax cut to 159 million workers – providing the typical working family with an additional $1,000 tax cut


• Allows businesses to expense 100% of key investments this year  – estimated to spur $50 billion in new investment


• Continues the American Opportunity Tax Credit, which provides up to $10,000 for four years of college and is helping over 9 million students and their families afford higher education


• Extends expansions of the Child Tax Credit and the Earned Income Tax Credit that the President fought for, providing a tax cut for 15.7 million families with about 29.1 million children

The American Recovery and Reinvestment Act included a broad range of tax cuts aimed at making the tax code more fair and supporting the middle class:

• 95% of all working families received a tax cut


• 70% of the tax benefits went to the middle 60% of American workers


• Millions of families were lifted out of poverty by the tax cuts in the Recovery Act


• More than $150 billion in tax cuts helped low-income and vulnerable households during the economic recovery


• About 1 Million jobs were created or saved by these tax cuts alone

Guiding Principles

Restoring Fairness

For too long, the U.S. tax code has benefited the wealthy and well-connected at the expense of the vast majority of Americans. President Obama’s aims to restore fairness to the tax system by providing the Making Work Pay tax cut to 95 percent of working families while closing loopholes that prevent wealthy companies and individuals from paying a fair share.

Supporting the Middle Class

The President will also make it easier for more Americans to save for college education, homeownership, and retirement by expanding tax preferences that currently benefit only the wealthy.

Making Taxes Consistent and Simple

In addition, the President supports making refundable tax credits permanent and simplify confusing provisions in the tax code, encouraging saving and creating a tax system that works for all Americans.