The new chairman of the House committee responsible for writing U.S. tax legislation predicts the Bush era tax cuts will expire for the wealthiest Americans, but that tax cuts for middle income families will remain in place.
Speaking at a National Press Club lunch, Rep. Sander Levin (pictured), D-Mich., chairman of the powerful House Ways and Means Committee, said Wednesday that "The divergence of income we've seen in the last decade means we should keep the middle income tax cuts and let those for the wealthy expire, and I think that is going to eventually happen."
He did not outline specific action that he expects his committee to take. If Congress does nothing, however, most of the Bush tax cuts will expire at the end of this year.
Middle Class Incomes Have Stagnated
Levin took over the House tax-writing committee in March after the previous chairman, Charles Rangel, D-N.Y., was forced to step down due to ethics charges.
During the last economic expansion from 2001 to 2007, the 1% of Americans with the highest incomes received two-thirds of the increased national income, while middle-class incomes stagnated, he said.
President Obama has called for allowing the Bush tax cuts to expire for couples who earn more than $250,000 per year, while cutting taxes for middle-income people.
Creating Jobs Is a Top Priority
Creating more jobs will be the committee's top priority, Levin said. "Jobs is our Number One issue," he declared, pledging to take additional action to spur job growth.
The committee held hearings last week on creating "green jobs" that help the environment. Levin lauded the automobile industry for endorsing a public-private partnership to develop technologies to develop energy-efficient automobile batteries.
The public-private partnership is the underlying premise of a tax extenders bill that includes research and development tax credits that Congress is working on.
Levin Eyes Change to Estate Tax
Levin indicated he wants to change the current estate tax law. In 2010, the estate tax expired, but under current law in 2011 it will revert to 2000 levels, when estates worth more than $1 million were liable for the federal tax. In 2009, estates below $3.5 million were not liable for estate tax.
"I find this uncertainty unacceptable and unfair," Levin said. Many wills are written to leave as much to the children as possible below the threshold at which estate taxes must be paid, with the rest going to the surviving spouse. "Today that means that the children may well be left with nothing," he said.
Levin also called for changes to trade agreements with Panama and Korea, which ships about 700,000 cars to the United States annually. In contrast, he said the U.S. sells less than 10,000 cars to Korea. "It's a one-way street," he said.
He was critical of Latin American countries, singling out Columbia. Latin American countries, have "deep disparities in terms of income and opportunity," that prevents the rise of a middle class. "We have to expand trade, but do so in a way that spreads its benefits," he said.
House's Levin Predicts Bush Tax Cuts for Wealthy Will Expire