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Tax Relief
Under the last three years of the Clinton administration, our nation ran an annual budget surplus for the first time in many years. These surpluses allowed us to re-evaluate our tax structure and provide appropriate tax relief.
As I evaluated a wide variety of proposals for tax relief then – and as I evaluate any proposals for tax relief now – I was guided by three principles:
1. Our tax system must be fair, and all Americans should share in tax relief;
2. Any tax relief package must not lead the nation back to deficit spending;
3. Any tax relief package must not threaten the future of Social Security and Medicare.
I voted against the President’s 2001 and 2003 tax cut proposals – a combined cost of $1.35 trillion – because they violated all of these principals.
The Administration said the tax cuts would spur economic growth. As we face record levels of unemployment, a middle-class credit crunch, and a nation-wide housing crisis, it is clear they did not. The Administration said the tax cuts would spur personal investment. As we face decreased retirement wealth, it is clear they did not. The Administration said it would not drain the Treasury’s coffers. As we face a $400 billion deficit, it is clear they did just that.
Many of the individual tax credits contained within the 2001 and 2003 proposals that I did support, such as the child tax credit, the research and development tax credit, and the Alternative Minimum Tax (AMT) fix, were put on shortened timelines. Now Congress must be consider these credits and fixes every year in order provide the same tax relief to middle-class Americans and hard-working small business as was provided to wealthier tax brackets for almost 10 years in one vote. Operating under Pay-Go requirements (each additional federal expenditure must be off-set with a corresponding reduction in spending) makes extending these annual credits very difficult, but I will continue to support tax relief that impacts those who need it most.
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Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) was originally enacted in 1969 to ensure that all taxpayers, especially high-income taxpayers, pay at least a minimum amount of federal taxes. However, the AMT is not indexed for inflation, and this factor, combined with recent reductions in the regular income tax, has greatly expanded the potential impact of the AMT. Without a patch, millions of additional taxpayers will be affected by the AMT.
Without a doubt, Congress must pass a one-year AMT fix, if not a permanent repeal. It is unacceptable that a tax program created to encompass so few now encompasses so many, and will continue to encompass a greater number of taxpayers each year. It also is unacceptable that the AMT fix will not be off-set through decreased federal spending in other areas. The money we save American taxpayers today should not be paid by American taxpayers of tomorrow.
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Economic Stimulus
In light of increasing signs of a recession, I support meaningful and fiscally-responsible economic stimulus efforts. A package should be based on three principles: first, it must be limited to a true stimulus package—that is, it must provide a strong boost to our economy in the short term, second, it should not be used to provide further special tax breaks to the wealthiest individuals and corporations, and third, the package should be targeted to assist those who are facing special financial challenges, including those who have lost their jobs due to the economic downturn.
I voted for the rebate checks, and am glad to see data that clearly indicate the short-term economic boost. If necessary, Congress should consider a second, and longer-term, stimulus package to capitalize on that boost. Such a measure should include social benefits for those who need a helping hand through this credit and housing crisis, and tax credits for small businesses and the other economic drivers of our country.
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Estate Tax
I strongly believe it is time to deliver true estate tax relief to Wisconsin family farms and small businesses that also protects our ability to pay down the debt and shore up the long-term solvency of Social Security and Medicare. The tax bill that was signed into law in 2001 will eliminate the estate tax, but allowed nearly 10 years – through 2010 – for it to be fully phased out. However, in 2011 the estate tax will again be part of the tax code.
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Marriage Penalty
I believe the marriage penalty is an unfair burden on many working families and I strongly support legislation to eliminate it. The tax cut bill passed in 2001 does far too little for Wisconsin families. It increases the standard deduction for married couples and gradually increases the number of people taxed at the lowest tax rate. However, despite all of the fanfare from advocates, the penalty does not fully phase out until 2009, and then is restored in 2010. Wisconsin’s families deserve better.
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Minimum Wage
I believe that all Americans deserve a living wage that allows them to provide for their families. At current levels, the minimum wage leaves many families in a shortfall, having to choose between necessities such as health care, food and housing.
One of the top priorities of the new Democratic Leadership in Congress was to raise the minimum wage. I am pleased that we were successful in passing the first minimum wage increase since 1997. In July 2007, the minimum wage was increased to $5.85, and on July 24, 2008 the minimum wage was increased again to $6.55. One more adjustment is due on July 24, 2009 when it will be increased to $7.25. These increases are important and will help those in the lowest paying jobs to have the means necessary to provide for themselves and their families.
Employees who earn within 25% of minimum wage are more likely to be women, and their families are less likely to have health insurance coverage from any source. I will continue to fight to remedy the imbalance in women’s pay, and ensure that all individuals have health care coverage, no matter their income.
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Family and Medical Leave
Currently, the Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid leave to parents to care for their newborn, newly adopted child, or a seriously ill child, spouse, or parent. It also provides leave to temporarily disabled workers, including those disabled because of pregnancy. In addition, FMLA protects the continuation of group health insurance for the employee on the same basis as before they leave and protects the right to the same or an equivalent job when the leave ends. Unfortunately, the FMLA only covers employees who have worked at least 1,250 hours during the past year, which means that part-time workers are completely excluded.
In 2007, almost 25 million people worked part-time and represented 16 percent of the workforce. Two-thirds of all part-time workers are women. Many of them have small children or are attending school full time and do not have any choice but to work less than 35 hours a week. I believe that they should not lose their health insurance, or worse, their job, because they have to take care of a seriously ill child or parent.
For this reason, I am the lead sponsor of the Family Fairness Act, which amends the FMLA to expand benefits to an employee who has been employed, either as a full-time or part-time employee, for at least 12 months by the employer.
I will continue to work in Congress to expand the FMLA to cover all part-time employees, and ensure that we provide full support to working families.
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Labor Relations
One of the essential tenets of American democracy is choice. I support employees’ rights to choose to join with other employees to negotiate better working conditions. I have worked to expand the National Labor Relations Act to facilitate employees’ ability to bring together a labor organization. Helpful measures include the election of bargaining representatives, provision of mediation when necessary, and stronger penalties for employers that block labor organizing processes.
Both employers and employees can contribute to productive, supportive work environments, and I believe the federal government can help facilitate successful relationships between the two. I look forward to working with the innovative businesses and resourceful labor unions in Wisconsin to maintain a vibrant economy.
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