A Thanksgiving Message From Congressman Peter Roskam (R, IL)

-By Peter Roskam, Representative from the Illinois 6th District

As we enjoy this Thanksgiving Day, we have much to be thankful for. This holiday is an opportunity to enjoy time with friends and family, and to reflect on the many accomplishments and challenges the past year has brought.

One of the challenges most on the minds of families and individuals throughout Illinois is the looming federal income tax hike set to take effect in just five short weeks.

As I have traveled across the Sixth Congressional District, speaking to small business owners and local residents, I have heard an outpouring of concern that without immediate action, Congress will allow tax rates to climb higher for every American taxpayer, from the very lowest end of the tax bracket to the very highest. Meanwhile, our economy continues to struggle with persistently high unemployment that has left many in Illinois hurting from unemployment and under-employment. Thanksgiving is a day to be thankful for all that we have, but especially that we live in a country where we have the freedom and opportunity to create a better life for ourselves and our children. That opportunity–to be financially independent, to create a business, to earn and spend the money we work for as we see fit–will be diminished on the first day of 2011, when all federal income taxes are set to go up. All told, Uncle Sam will seize $3.8 trillion more of our hard-earned dollars beginning in just a few short weeks.

An enormous number like $3.8 trillion is sure to cause a little sticker shock, but make no mistake, this tax increase will produce serious, concrete consequences for families like yours and mine, and will have a detrimental impact on the very marketplace we are counting on for recovery and renewed job creation. According to an analysis by the national taxpayer education and advocacy group Tax Foundation, the average middle income family in Illinois’ Sixth Congressional district will see their taxes rise by $8,737.

Just what exactly will the tax increases mean for you? It only takes a moment to see how the tax math can quickly add up to big new costs for you and your family.

According to the non-partisan Congressional Joint Committee on Taxation (JCT), January 1, 2011 will see the bottom tax rate jump from 10% to 15%, ensnaring 88 million taxpayers with an average $503 in new taxes next year. Similarly, the middle and top tax brackets will increase, with the highest rate jumping from 35% to nearly 40%. That’s just the beginning. Also set to start in five weeks, the child tax credit will be cut in half, costing 31 million families another $1,033 in higher taxes next year. Under the coming tax increases, the marriage penalty will get reinstated, making it more expensive for married individuals to file their taxes than if they were single and filing under the exact same earnings. That change will increase taxes on 35 million married couples by an average of $595.

Sadly, the new costs don’t end there. For those saving for their children’s education or a future retirement, there are new and higher taxes on investment income and retirement savings. To begin with, the death tax will skyrocket from 0% to as high as 55%, costing millions of hours and dollars in estate planning for entrepreneurs looking to keep their small business in the family. Additionally, the top rate on investment income in the form of capital gains will rise from 15% to 20%, and the top tax on dividends will mushroom from 15% to nearly 40%. All told, more than 26 million taxpayers will pay an average of $1,240 more in investment-related taxes next year. Over a third of those facing steep investment tax increases will be seniors ages 65 and over who are living on a fixed income. Instead of fostering a stable and predictable climate that encourages investment, innovation and growth, these tax increases will take us in the direction of more economic stagnation and joblessness.

With thousands of dollars in real costs for American families, it is no wonder people have been speaking out loudly throughout the recent campaign cycle for a new direction for our country. Congress has very little time left to act. It is critical for family budgets here in Illinois, as well as the American economy at large, that we work to ensure no one faces higher taxes during these difficult economic times.

http://roskam.house.gov/

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