By, Maria Aguilar |Staff Writer|
Bush-era tax cuts expire Dec. 31, raising taxes on middle class families in 2013. President Obama is trying to extend middle-class tax cuts through the end of next year.
The Senate has approved the proposal and unless the House of Representatives votes and passes the bill before Dec. 31, middle class families will see an increase of approximately, $2,200 for an average family of four, according to Whitehouse.gov.
“Middle class families are struggling to pay their bills and college students are broke. If the middle-class tax cut is not extended it is going to have an effect on these families,” said Erica Barajas.
The Democratic-controlled Senate and the Republican-controlled House of Representatives each have a different point of view for a solution.
The Senate’s approval of the bill, if passed, allows students to continue to have access to the American Opportunity Tax Credit, receiving an annual credit of $2,500 per student to pay for college expenses, according to Irs.gov.
Low and moderate-income working parents, who qualify, will continue to benefit from the Child Tax Credit, receiving $1,000 per child.
According to Whitehouse.gov,”What we should do right now is give middle-class families and small business owners a guarantee that their taxes will not go up next year,” said President Obama. “When families have the security of knowing that their taxes won’t go up they’re more likely to spend, and more likely to grow the economy. When small business owners have certainty on taxes an can plan ahead they’re more likely to hire and create new jobs. And that benefits all of us.”
However, the House of Representatives will only pass the bill if the lower tax rates apply to everyone, middle-class and high-class, according to CNN.com.
The bill currently states only families and businesses with incomes less than $250,000 will continue to fully benefit from tax cuts, which affects 114 million middle-class families, while wealthier Americans pay more.
The Republican-dominant House of Representatives, wants these tax cuts to include families making more than $1 million, giving them an average tax cut of $250,535.
This would affect 2 percent of families with an average income of $800,000 according to Politifact.com.
“With taxes you want to give credit to everyone. You can’t cater to one class. It needs to be clear across the board or eventually it will begin to affect the class who is excluded from the tax credits,” said CSUSB alumni Stevie Gawryluk.
Republicans argue the proposal allowing rates to increase on higher-income Americans will stunt economic growth, as stated in an article on CNN.com
“This proposal guarantees that taxes are going to go up on millions of our small businesses,” said Republican Minority Leader Mitch McConnell.
While viewpoints may differ, if the Bush-era tax cuts are not passed by Dec. 31, students will face more expenses next year.