I heard a commentator talking on the radio about "pork" in the bill that extends the Bush tax cuts. I thought, that's funny, because I've never heard things like the child tax credit, the alternative minimum tax (AMT) fix, the ethanol tax credit, and a lot of other tax breaks referred to as "pork."
Tax items included in the bill are existing tax breaks that have expired or will soon expire, not new ones. To let any of them expire would be harmful to the economy and to millions of middle income taxpayers who have built household budgets around these tax cuts.
For instance, if the Bush income tax cuts were not extended it would mean that more than 840,000 Nebraskans who earn less than $200,000 a year would see smaller paychecks next year. That's 98 percent of all Nebraska taxpayers.
The bill extends the ethanol tax credit. Were the tax credit to expire it would create financial difficulties for Nebraska's 25 plants resulting in the loss of nearly 13,700 jobs in our state while increasing our dependency on foreign oil.
The bill also renews the tax credit for biodiesel, which expired at the end of 2009. In 2009, the biodiesel industry supported 23,000 jobs. In 2010, the industry supported 14,560 jobs, a loss of 8,440 jobs that can be directly attributed to the lapse of the biodiesel tax incentive.
The bill extends the 1603 tax investment credit for renewable energy. This program saved 55,000 jobs in wind energy during the economic downturn. Extending 1603 will ensure the continuing development of renewable energy projects.
Think about the impact on more than 161,000 families in Nebraska if the child tax credit were to expire. That's how many Nebraska families claimed the credit in 2008 realizing an average tax cut of $1,370 per family. This bill extends the child tax credit, making sure these families can continue to make ends meet.
The bill extends dozens of other existing tax relief provisions, including lower capital gains and dividends rates and it sets the estate tax rate at 45% with a $5 million exemption, so small businesses and families are protected in 2011 and 2012.
The bill extends marriage penalty relief, adjusts the AMT, and extends the earned income tax credit, claimed by nearly 123,000 Nebraska families. It also extends unemployment insurance for 13 months, a lifesaver for many people who've been out of work due to the economy.
The tax cut bill consists of many tax relief provisions that benefit workers and businesses. For businesses, tax incentives that encourage investment, expansion and charitable giving are extended and for workers, there is a 2 percent cut in the payroll tax.
This bipartisan bill will prevent tax hikes from impacting hundreds of thousands of Nebraskans on January first. It may not be the best possible solution but it is the best solution possible.