PI Original Adam Doster Friday April 16th, 2010, 11:44am

Kirk's Misleading Tax Day Message (VIDEO)

Mark Kirk claims that the federal policies supported by Alexi Giannoulias would increase "income tax rates ... across the board." As is his custom, Kirk omits crucial context.

U.S. Senate candidate Mark Kirk couldn't let Tax Day slip by without taking a swipe at President Obama and Alexi Giannoulias on economic policy. In a video posted on his campaign website, the North Shore Republican criticized the Democrats for "opposing" the Bush-era tax cuts, which are scheduled to retire at the end of the year. "If the tax relief expires," Kirk says, "income tax rates will increase across the board." Watch:

KIRK: Congress will soon decide whether to extend the tax relief passed in 2001 and 2003 or allow that tax relief to expire, raising taxes.  If the tax relief expires, income tax rates will increase across the board.  Capital gains taxes on investments will go up and hurt our economic recovery.  The marriage penalty and the death tax will return.  And the child tax credit will be cut in half.  Alexi Giannoulias opposes the tax relief of 2001 and 2003.  He would let your tax rates go up.  But I disagree. {Emphasis ours]

If Congress allows the Bush-era tax cuts to fully expire, tax rates would indeed rise marginally for almost all earners except singles earning between $8,500 and $43,550 and families earning $17,000 and $57,770. The Springfield News-Sun offers a good chart broken down by tax bracket here.

But as is his custom, Kirk omits crucial context.

President Obama's FY 2011 budget proposal, which he unveiled in February and which Alexi Giannoulias supports, calls on Congress to extend the Bush era tax cuts for all families making less than $250,000 and individuals taking in less than $200,000. And for those high earners, the marginal tax rates would jump only slightly. (Three percent on most and 4.5 percent of individuals and households making more than $379,650 annually.) Obama would also continue to fund the Earned Income Tax Credit (EITC), which he expanded the last two years.

The Congressional Budget Office thinks this is sound policy. After analyzing 11 options to stimulate growth and job creation, the budget gurus found that extending the full 2001 and 2003 tax cuts was the least stimulative option, far worse than public spending on infrastructure or extending aid to cash-strapped states. Extending the cuts for the richest two percent of Americans would also add $826 billion to the deficit over the next decade. By contrast, health care reform, which the congressman wants to repeal and Giannoulias supports, would save $143 billion over the next 10 years while insuring 1.3 million Illinois residents.

Kirk also ignores the tax cuts the White House has implemented over the past year. Through changes to the EITC, the establishment of the Making Work Pay Credit, and increased exemptions from the Alternative Minimum Tax, 98 percent of families in Illinois received a tax cut this past year. On average, those breaks added up to $1,209 per person. They were also distributed fairly evenly (PDF) along the income scale, which stands in direct contrast to the Bush-era policies that Kirk wants to leave untouched.

So Kirk's claim that the federal policies supported by Giannoulias would increase "income tax rates ... across the board" just doesn't stand up to scrutiny.

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