Minnesota's two U.S. Senators voted for a proposal that would keep taxes at current rates for most Americans. Taxes, however, would increase on couples earning more than $450,000 a year and individuals earning more than $400,000 a year. The measure also delays automatic spending cuts.
The Senate passed the bill early this morning 89-8. The House has yet to vote on the proposal. Congress and President Obama have been racing to reach a deal that would avert automatic tax hikes for all Americans and across the board spending cuts that were scheduled to kick in today. The plan fails to continue a 2 percent payroll tax cut - a temporary measure enacted a few years ago that was aimed at stimulating the economy.
The measure also continues current agriculture policies for another nine months. Advocates have been pushing for a more comprehensive farm bill to come before the end of the year.
Economists had argued that the impact of looming tax increases and spending cuts could put the nation in another recession.
Citing the need to keep taxes low for middle-income Minnesotans, DFL Sen. Amy Klobuchar and DFL Sen. Al Franken both supported the measure.
Here's Klobuchar's statement:
"I voted for this compromise because the last thing we should be doing this New Year's is sticking middle class families with a tax hike. I fought for and wanted a larger, more comprehensive plan that balanced revenues and spending cuts. I will continue to push for a broader plan to reduce our debt and give businesses and families the certainty they need."
Here's Franken's statement:
"I voted for this bill because it contains a number of very important provisions, including tax cuts for working and middle-income Minnesotans, an extension of unemployment insurance for so many Americans who are looking for work, and the production tax credits that mean so much to our state's renewable energy producers. And it was crucial to me that Medicare, Medicaid, and Social Security beneficiaries were protected. "There are some provisions I most certainly don't like, particularly those in the extension of the Farm Bill: cuts in conservation and energy, and the gutting of the Beginning Farmers and Ranchers Program. But I'll continue to work to pass a five-year Farm Bill this year so that Minnesota's ag community has the support and certainty it needs. "While I don't think this package raises sufficient revenues toward paying down the debt or to make the investments in infrastructure, education, and research and development needed to grow our economy, I knew that no bill would have 100 percent of what I wanted, and I will continue to fight for the priorities that I believe will best serve Minnesota."
Over the holidays, I wrote and emailed Republican members of Congress to do two things:
1. To explain why I am much more worried about the catastrophic effect of falling off the fiscal cliff and defaulting on our national debt than I am about raising my taxes
2. To implore them to please get back to work, compromise, and avert this catastrophe.
Why I care more about the economy than my personal tax rate: adjusting my personal tax rate a few percentages in either direction has virtually no effect on my hiring, though ticking the GDP a few points has a huge impact on job creation. This is because it makes no sense for me to spend the benefit of a tax windfall on a new employee who will sit idle because the economy is flat. This is not rocket science.
Moreover, if the economy crashes as a result of Congress' failure to reach a compromise, my personal revenue will suffer far more than if my taxes were increased. Again, not rocket science.
I understand Republicans may be standing on principle not to raise taxes. While I can appreciate one’s commitment to principle, in this particular case, I don’t understand how this particular principle helps my business, my country, your party, or me. I doubt many other businesspeople will understand either.
I doubt there is a single rational person who elected these Representatives with the intent for them to watch our country burn. Please step up and do the right thing -- now.
P.S. Kudos to both Klobuchar and Franken for doing their job.