U.S. Senator Mike Johanns says a combination of tax increases and spending cuts set to happen in January would hurt Nebraska families’ bottom lines.
On January first, the 10 percent across-the-board spending cuts take effect, along with tax increases. A Congressional Budget Office report says without Congressional action, those items could send the U.S. economy off what’s being called the “fiscal cliff” and in to a recession.
Johanns says some of the tax cuts set to expire are important to Nebraska families. "The child care tax credit will be reduced by 500 dollars. That’s like getting 500 dollars taken off your tax return, it’s almost like getting a coupon from the IRS saying if you’re paying for child care, or if you have children you get this tax credit, it goes off your taxes. You have an education tax credit, the marriage penalty was improved, it was not eliminated but it was improved, that would go away."
Johanns says discussions on how to prevent the fiscal cliff can’t just focus on raising taxes on wealthy Americans. He says there should also be talks about tax code reforms and spending on entitlement programs.
Johanns’ comments came Thursday during his weekly conference call with Nebraska media.