Durbin: Vote for Tax Cut Plan is a Vote for Illinois Middle-Class Families
In Illinois, extension of tax cuts protects 6 million middle class families; prevents 135,000 workers from losing unemployment benefits during holidays
[WASHINGTON, D.C.] – Noting that millions of middle class families in Illinois will benefit from lower individual tax rates and tax credits, and that 135,000 of unemployed workers Illinois will continue to receive much needed benefits throughout the holidays, U.S. Senator Dick Durbin (D-IL) today announced that he will vote for final passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (H.R. 4853) – the compromise that was agreed to by President Obama and Congressional Republicans last week.
“The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act that the Senate will vote on today, will extend lower tax rates for millions of Illinois families and puts more money in the pockets of those making less than $200,000 per year,” said Durbin. “The legislation also ensures that 135,000 workers in our state will not lose their unemployment insurance benefits by the end of December. While I do not agree with everything in this compromise, there is no doubt that this bill protects hard-working Illinoisans.”
“Provisions in this bill giving tax benefits to the wealthiest among us are awful. They will add to our nation’s debt and do not help our economy out of this recession. The President learned, and I can confirm, Republicans in Congress made this unfortunate subsidy for the rich a requirement for their support in helping working families and the unemployed,” Durbin added.
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act will help Illinoisans by:
- Cutting taxes for middle class Illinoisans by extending for two years the lower individual tax rates enacted in 2001. In 2008, 97% of the 6,112,426 of tax returns filed in Illinois reported income at or under $200,000. These taxpayers will see all of their lower tax rates extended.
- Extending unemployment insurance benefits for 13 months. According to the Illinois Department of Employment Security, 135,000 individuals in Illinois will be left with no assistance by the end of December if the emergency unemployment insurance benefits are not reauthorized this month. Another 68,000 individuals in Illinois will exhaust their benefits by the end of January and an additional 58,000 individuals will exhaust their benefits by the end of February.
- Cutting taxes for middle class Illinoisans by reducing payroll taxes paid by workers from 6.2% to 4.2% for one year. This will put an additional $112 billion into the pockets of middle class families. The average worker who earns $50,000 would save $1,000 from this provision, on top of the tax savings from other parts of this bill.
- Preventing tax hikes on middle class individuals and ensuring that dividends continue to be treated as capital gains for all taxpayers. In Illinois, 87% of all taxpayers claiming long-term capital gains income have income below $200,000. And 89% of all taxpayers who receive dividends earn below $200,000.
- Providing Alternative Minimum Tax relief in 2010 and 2011. This will keep 866,565 middle class families in Illinois from paying higher taxes for 2010.
- Extending for two years the expanded child tax credit. The Child Tax Credit provides important tax benefits to low- and middle-income families: in 2008, 1,068,928 families in Illinois claimed the Child Tax Credit, resulting in an average tax cut of $1,238.
- Extending for two years the American Opportunity Tax Credit. This credit makes college more affordable for many lower- and middle-income Americans by offsetting the cost of tuition expenses such as books and course supplies. In 2009, 382,000 Illinoisans claimed the credit for an average tax break of $1,861.
- Extending for two years the expansion of the Earned Income Tax Credit. In Illinois, 954,070 families claim the tax credit receiving an average $2,074 tax break. The credit supports working families and has proven to be a successful strategy for encouraging people to choose work over welfare.
- Renewing the $1.00 per gallon biodiesel tax credit. The credit will be applied retroactively to fuel produced in 2010 and extends the credit through 2011. The biodiesel industry is dependent on this extension of the tax credit to re-hire laid off workers and to fire up idled plants. Last year, the U.S. biodiesel industry supported 1,238 jobs in Illinois, which boasts more than 128 million gallons in biodiesel production capacity.
- Extending for one year the 45¢ per gallon ethanol blenders’ credit and the 54¢ per gallon tariff applied to imported ethanol. The ethanol industry had predicted that allowing the blenders credit to expire would result in a loss of 112,000 jobs nationwide, including 13,854 in Illinois. Illinois is home to 14 ethanol plants and ranks third in ethanol production.
- Extending through 2011 the start-of-construction deadline for the Section 1603 grant in lieu of tax credit program, which was set to expire at the end of the month. Section 1603 provides renewable energy developers with grants of up to 30% of project costs and has helped spur the development of renewable energy projects in a climate where investor demand for tax credits is diminished. The grants have supported 18 clean energy projects in Illinois.