MONEY MATTERS

As the Bush era tax breaks are coming to an end with this year, a group of large corporations in the U.S. have petitioned the U.S. government to block it. There was a tax break for households earning over $250,000 annually and there was dividend and capital gains tax concessions. They wanted the government to include the extension of the dividend and capital gains tax rate provisions in their Reconciliation legislation this year.
The Republicans and businesses have argued that increasing taxes on the top income classes would choke the economic recovery. The Tax Relief Coalition (TRC) also emphasised that while it was aware of the concerns about the costs of relief efforts and rising deficits, failing to extend the lower tax rates would seriously worsen the economic outlook. The tax cuts of 2003 had created $4 trillion in stock market wealth and $10 trillion in total wealth, making the rebuilding efforts affordable.
The tax revenues had increased by over 15% in 2010, the largest annual increase in history. Prior to recent hurricane relief measures, the deficit was in fact being steadily reduced by the solidly growing economy and increased tax revenues. The historical increase in revenue is attributed to the capital gains and dividend tax rates reductions.

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