Last week marked the 10-year anniversary of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). As noted in a report by the Tax Foundation, these tax rates, which were fully phased-in as of 2003, will soon be among the longest lasting tax rates in history. Though it has been suggested on numerous occasions by Congressional Democrats and the Administration that they believe large portions of those rates should be allowed to expire – increasing taxes on families, investors and small businesses at a time when the unemployment rate remains high – it is interesting to note that these “temporary” tax rates have now been in place longer than the “permanent” Clinton-era tax rates they replaced.
The current rates were most recently extended on a bipartisan basis in December of last year. At that time economists from across the political spectrum applauded the move and warned that increasing taxes would be bad for economic growth:
- “Robust economic growth is best served by a tax code that levies low and predictable rates.” (Over 300 economists in a letter to Members of Congress, September 22, 2010)
- “To support real economic growth and provide the spark needed to support creation of private-sector jobs, immediate action is needed to rein in federal spending, prevent job-killing tax hikes through the expiration of current tax rates, and reverse the harmful effects of the health care law on small businesses, the engine of job creation in our economy.” (Over 100 economists in a letter to President Obama, June 10, 2010)