The candidates running for Congress in the Massachusetts 6th District have very different opinions on the U.S. House’s vote Wednesday to extend tax cuts for all Americans for another year.
“All the economic experts tell us that at a certain point — $250,000 per year and above — none of that (tax savings) goes back into the economy,” said Congressman John Tierney, D-Salem, who voted against retaining the Bush-era tax cuts for income over a quarter million dollars. “It is by far the least effective way to stimulate the economy and get people back to work. That money goes right into a savings account.”
Tierney supports a Democrat-backed proposal that would extend the Bush-era tax cuts for everyone for the first $250,000 in income, but raise taxes for earnings beyond that. Keeping taxes low for those who earn less than $250,000 will stimulate the economy, Tierney said.
“Middle class families will spend that money to buy food and other necessities” rather than socking it away in savings accounts, he said.
Republican challenger Richard Tisei, meanwhile, echoed House Speaker John Boehnor, saying that raising taxes on anyone right now as the economy continues to struggle would be counterproductive.
“Today unemployment reached 8.3 percent ... the last thing we should be doing right now is increasing taxes on anybody,” Tisei said yesterday in an interview. “The way to get out of this mess is to start growing the economy again. We need a predictable tax code. It should be reformed in a way that will promote growth, hiring and business expansion.”
Democrats want to allow the top tax bracket rates to revert back to 39.6 percent, which was the rate under President Clinton in the 1990s. Currently, the top rate is 35 percent for household income over $388,350.
Republicans want keep the Bush tax cuts across all six income brackets. The GOP also wants to keep dividend and capital gains tax and the estate tax rates the same, while under the Democratic proposal those rates would go up.
Tierney called it “odd” that Republicans are pursuing plans that would cut revenues yet “are the ones screaming loudest about the deficit.”
“Their policies have caused these high deficits,” he said.
Tisei said, if elected, he would push to implement a tax plan based on the suggestions of the Simpson-Bowles Commission report, named after the chairs of the commission appointed by President Obama in 2010 to deliver a plan to reduce the budget deficit. The bipartisan plan called for balanced approach, including reducing the number of tax brackets from six to three and lowering tax rates. It also included spending cuts, cutting some entitlement programs, and increased revenue by eliminating certain tax deductions and subsidies.
“It is a lot better and a lot fairer tax code. It eliminates loopholes, certain deductions and lowers tax rates,” Tisei said. “That is the direction I would like to go in.”
Tierney also advocates for a comprehensive, balanced approach, he said.
The Democratic proposal “is the right way to do it, because it’s a balanced approach,” he said
That includes not extending the Bush tax cuts for the top 2 percent of earners, closing costly and unnecessary subsidies and also investing in job training, education, science, infrastructure and other areas to grow the economy, he said.