Hatch Amendement to S. 2237
TO: Reporters and Editors
FROM: Antonia Ferrier & Julia Lawless for Senate Finance Committee Ranking
Member Orrin Hatch (R-Utah)
RE: Hatch Amendment to S. 2237
DATE: Tuesday, July 10, 2012
This afternoon, U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, filed amendment #2491 to S. 2237, the Small Business Jobs and Tax Relief Act, which is currently being debated in the Senate. The Hatch amendment would extend current tax policy through the end of 2013 and instructs the Senate Finance Committee to undertake comprehensive tax reform during that time.
In a speech on the Senate floor, Hatch said of his amendment, “I have an amendment to this bill that will prevent this historic tax increase, and will pave the way for tax reform in 2013. That is where my focus will be until this tax hike is prevented, and I hope that my colleagues will join me in preventing this looming tax increase on the American people. Forty of my colleagues on the other side of the aisle voted to temporarily extend this tax relief in 2010. They should do so again. President Obama once said that it would be foolish to raise taxes during an economic downturn, and he acted accordingly. Our economy remains weak today. The only thing that appears to have changed is that President Obama has apparently determined that his path is class warfare. My hope is that my colleagues who have supported this tax relief in the past, put the President’s short-sighted and self-interested partisanship aside, and vote on behalf of their constituents to extend this tax relief to America’s families and small businesses.”
Yesterday, President Obama announced that he supports raising taxes on the top two marginal tax brackets. Under the President’s plan, nearly 940,000 flow-through businesses and 53 percent of all flow-through business income would be hit by the President’s proposed tax hikes, according to the Joint Committee on Taxation. According to the National Federal of Independent Businesses, up to 25 percent of the workforce is employed by businesses that will be affected by the President’s proposed tax hikes.
In December 2010, President Obama agreed to stop all the tax hikes citing the weakness of the economy. The economy now is as weak as it was in 2010. There’s been 41 consecutive months of unemployment over 8 percent and economic growth is weaker today than it was in December 2010.
Below is a summary of Hatch’s amendment:
The Hatch amendment would extend the 2001 and 2003 tax relief that is set to expire on January 1, 2013 for one year through December 31, 2013, including a straight extension of the expiring individual tax rates, family tax relief, death tax relief, and a patch to stop the Alternative Minimum Tax (AMT) from hitting millions of American middle-class families.
The amendment also directs the Finance Committee to undertake a comprehensive overhaul the U.S. tax code during that one-year period and outlines specific proposals that tax reform should achieve, including:
• Simplification of the tax code that provides revenue neutral reform against current tax policy and includes the reduction in the number of tax preferences;
• An income tax rate for individuals that is significantly below 35 percent and a corporate tax rate that is no higher than 25 percent;
• Full repeal of the Alternative Minimum Tax (AMT);
• Applies increased revenue from economic growth to additional tax reductions and prevents such revenue form going towards additional federal spending; and
• Requires the adoption of a territorial tax system as an anchor for corporate tax reform.