Crowley Spearheads Effort to Block GOP Middle Class Tax Hike

February 17, 2011
Press Release

Washington, D.C. — Today, Congressman Joe Crowley (D-Queens, the Bronx), a member of the House Ways and Means Committee, tried to block Republican efforts to raise taxes on middle-income families.  During the Ways and Means Committee’s consideration of the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (H.R. 705), Crowley offered an amendment to repeal the middle class tax increase proposed in their bill. Along a straight party-line vote, Republicans rejected the Crowley amendment and, in turn, rejected their own pledge to not raise taxes on American families.  The Republicans’ proposed tax increase would mean that slight changes in income throughout the year could force middle-income families to owe significantly more taxes on their health benefits.

“The bottom line is a promotion, bonus or raise should be a boon for American families, not a burden. Unfortunately, Republicans want to penalize middle-class Americans for their hard work by raising their taxes or forcing them to opt out of health insurance coverage for their families. By voting down this amendment, Republicans have placed a high price tag on what is essentially a pat on the back for hard working Americans,” said Congressman Crowley.

Background:

  • Starting in 2014, as part of the new reforms under the Affordable Care Act (P.L. 111-192), families earning less than 400% of the Federal Poverty Level (approximately $88,200 in 2010 for a family of four) will receive tax credits to help cover the cost of their health insurance premiums. The amount of the credit will be based on a family’s income, marital status and number of children. Further, it will be paid from the U.S. Treasury directly to the insurance carrier.

 

  • The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (H.R. 705) would require families whose income rises during the year to pay back much larger portions of any excess tax credits they received, even though the tax credits never came to their own pockets. Middle-income families would be in danger that a slight increase in income, such as a raise or bonus, could force them to repay thousands of dollars, and many might decide to avoid the risk and not apply for these tax credits at all.
  • For example, the Republicans’ proposal would force a family of four earning $88,000 a year, but who got a small year-end bonus of $300, to repay all of the tax benefits they received to afford private health insurance for their family, since their newly-calculated income for the year would put them above 400% of the Federal Poverty Level. This tax increase is estimated at upwards of $5,000 based on an average family-of-four health plan costing $13,000 per year.
  • The Crowley amendment, which was offered during the consideration of H.R. 705 at the House Ways and Means Committee, would repeal from the Republican-drafted measure all provisions that would raise taxes on any American below 500% of the Federal Poverty Level, stopping the planned tax increase on middle-income families that earn up to $110,250 for a family of four. 

Congressman Crowley is a seven-term representative from the 7th Congressional District of New York, which includes sections of Queens and the Bronx. He serves as chief deputy whip in the Democratic leadership of the U.S. House of Representatives and is a member of the House Ways and Means Committee, which is responsible for all tax, trade and social security issues, as well as health and retirement security.