Taxes

Progress

The Middle Class Tax Relief and Job Creation Act of 2012 extends middle class tax cuts to prevent a typical working family from losing an average of $40 per paycheck, enabling them to keep about $1,000 of their hard-earned money in 2012.  The law also:

• Extends unemployment insurance so that millions of Americans who are looking for work will still be able to depend on the vital lifeline of unemployment insurance. 
• Includes important reforms that the President proposed in the American Jobs Act to help discourage businesses from laying off workers and to connect workers with jobs. 
• Includes a critical element in the plan the President outlined in the State of the Union to out-innovate the rest of the world by unleashing mobile broadband, investing in innovation, and building a nationwide public safety network.   It will mean a stronger economy and hundreds of thousands of new jobs. 

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. That’s why President Obama has successfully fought to cut taxes for middle class families and small businesses. And it’s why he has called for reforming our tax code and closing tax loopholes for millionaires and billionaires as well as hedge fund managers, private jet owners and oil companies.

Supporting the Middle Class

On September 12, 2011 President Obama sent The American Jobs Act to Congress. In keeping with these principles, the American Jobs Act would put more money in the pockets of working and middle class Americans by cutting in half the payroll tax that comes out of the paycheck of every worker, allow more Americans to refinance their mortgage, and cut payroll taxes in half for 98 percent of businesses.

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.