Mr. Speaker, I rise tonight with several of my colleagues in support of the Republicans' jobs and growth package, H.R. 2, which we are scheduled to vote on tomorrow; and in fact, this vote is so important, I am really going to be missing a…
Mr. Speaker, I rise tonight with several of my colleagues in support of the Republicans' jobs and growth package, H.R. 2, which we are scheduled to vote on tomorrow; and in fact, this vote is so important, I am really going to be missing a very significant event in South Carolina.
We are very proud that President George W. Bush is going to be commencement speaker tomorrow at the University of South Carolina for graduation. I am just so proud of our president there, President Sorenson, what he has done for our institution, the trustees, Mack Whittle, Miles Loaholt, Mark Buyck, Eddie Floyd. They are working so hard to make the University of South Carolina, my alma mater from law school, one of the best universities in the United States; and certainly having our President there tomorrow, I am just so proud, and I know that my wife, Roxanne, will be right on the front row with our sons Julian and Hunter and Alan to encourage the President.
Our economy is hurting and it needs an immediate boost. House Republicans believe the best way to get the economy back on track is to allow Americans to keep more of their own money, and I heard a few minutes ago that indeed it was not the public's money, it was not the people's money; but I know so well that, indeed, it is the people's money, and that is the first fact that we should address; and I appreciate good people like Jerry Bell of the Lexington County Chronicle making that point almost every week in his publication.
This will give the economy an immediate shot in the arm by accelerating tax relief from the marriage penalty, increasing the child tax credit and providing working families with more of their hard- earned dollars through accelerated income tax relief.
Furthermore, with sizeable, long-term tax relief on capital, businesses will receive investment incentives that will help create more jobs. This Republican plan is estimated to create 1.2 million jobs by the end of 2004 alone and will create many more in the years to come.
On the other side of the aisle, House Democrats are talking about a government growth package. It busts a $30 billion hole in the budget, guts the Republican child tax credit increases, and it weakens job growth by watering down Republican tax relief for small businesses. Once again, the Democrats' answer to every problem, raise taxes and spend more.
Americans are already overtaxed. Americans for Tax Reform, an invaluable nonprofit group headed by the visionary Grover Norquist, has tracked the tax burden in a way that puts it in proper perspective. Each year, Americans for Tax Reform determines the cost to government date which is the average date at which every American worker has earned enough to pay his or her share of taxes imposed by Federal, State and local governments. The cost to government date 2002 was July 1, representing the largest tax burden since 1996.
Today, we are working a full 6 months just to give Uncle Sam his yearly check before we can even begin to earn enough to pay for food, health care, medicine, housing, clothing, college tuition, car payments and all the other needs that we have to provide for our families.
My friend and former Congressman, the gentleman from Oklahoma (Mr. Watts), put it best when he said, ``Americans are taxed when we turn on a light. We are taxed when we use the phone. We are taxed when we eat lunch. We are taxed when we do brunch. Moms are taxed at the gas pump when they fill the tank to drive the kids home from a little league game. Dads are taxed when they try to save a few bucks for retirement in order to provide for their families, and Grandma and Grandpa are taxed for having the audacity to die.''
Ronald Reagan was even more blunt and always correct when he described the government's economic policy this way, ``If it moves, tax it.''
President George W. Bush understands that Americans are overtaxed. President Bush also understands that the only way to increase jobs in America is to allow individuals and small businesses to keep more of their own money to invest in our economy.
The gentleman from California (Mr. Thomas), the chairman of the Committee on Ways and Means, has crafted a very wise and sensible bill that takes the best solutions of President Bush's proposals, and I urge all of my colleagues to vote for this bill tomorrow.
Americans have given Republicans a tremendous opportunity to lead on issues that affect every working family. We must not squander this moment and work to bring them real tax relief. Let us hold true to the commission given by President Ronald Reagan.
We need true tax reform that will at least make a start toward restoring for our children the American Dream, that wealth is denied to no one, that each individual has the right to fly as high as his strength and ability will take him.
At this time, I will be yielding to the gentleman from North Carolina (Mr. Hayes). He is a very respected member on the Committee on Armed Services. He also serves on the Committee on Transportation and Infrastructure, the Committee on Agriculture; and I know firsthand the respect that his constituents have for him.
Last year, I went with my sons Julian and Hunter door to door in his hometown of Concord, North Carolina; and that is where one really finds out what people think of their local Congressman, and I found out that he was a person who was well thought of. He was highly respected and my colleagues will see tonight what a knowledgeable and fine person the Congressman from North Carolina is.
I yield to the gentleman from Pennsylvania.
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Mr. Speaker, I appreciate the gentleman bringing up the point about jobs.
Joining us in this discussion is the gentleman from Pennsylvania (Mr. Murphy). I am very proud that he is a member of the Committee on Financial Services and the Committee on Government Reform. Additionally he serves on the Committee on Veterans' Affairs. He is a freshman, but as a freshman he has been the most recent of being truly in a tough campaign and finding out what the people think. I look forward to joining the Mental Health Caucus along with the gentleman. I am proud that the gentleman has taken that lead, and I yield to the gentleman from Pennsylvania (Mr. Murphy).
Mr. Speaker, I thank the gentleman for his input. For a person who is leading a young family, the gentleman is making a difference trying to protect them for the future.
As we discuss H.R. 2 tomorrow, the Jobs and Growth Tax Act of 2003, we are going to hear a lot of scare tactics and misinformation, but I would like to go over what the different points are of the act because I believe the American people will understand that this is beneficial again in creating jobs, creating opportunities for our young people, for persons of all ages to have a better life. I am so pleased that we have an opportunity to discuss it tonight, and then tomorrow to vote on it.
The first point about the acceleration of the 2001 tax relief for individuals, the President achieved an historic cut in taxes, and this is being accelerated.
The first point about the child credit, this will increase the child credit to $1,000 for 2003, 2004, and 2005. I am so aware of the costs, having raised 4 children myself, along with my wife Roxanne, and I know how helpful this is going to be to young families as they are able to care for their children and give them the opportunities they want.
The 10 percent bracket, this will accelerate the expansion of the 10 percent bracket for 2003, 2004 and 2005.
Marriage penalty relief, this accelerates the expansion of the 15 percent bracket and the increase in the standard deduction for married persons filing joint returns, again in the years 2003, for immediate relief, 2004 and 2005.
Individual rate cuts, this accelerates the 2006 individual rate cut scheduled for 2003 retroactively. That means that immediately the people of the United States will receive benefits, and families could receive a benefit on average of $1,048. This is real money to families, and so helpful to raising children and meeting the needs that we have of car payments, mortgage payments, and medical bills.
The increase in the individual alternative minimum tax, the exemption amount, this will be increased by $7,500 for single persons and $15,000 for joint filers in 2003, 2004, and 2005.
To help create the jobs, the business investment incentives that are in the bill which will be voted on tomorrow, first is bonus depreciation. This will increase the bonus depreciation from 30 to 50 percent and extend it through December 31, 2005. This will encourage businesses to buy equipment to increase manufacturing which creates jobs. I want to commend the gentleman from Illinois (Mr. Weller), who helped lead the effort to provide for the bonus depreciation increase so that small businesses could grow.
Then we have small business expensing for 2003 through 2007. That is an increase in the amount small businesses can expense. That would be immediately to from $25,000 to $100,000. It increases the definition of small business from $200,000 for capital purchases to $400,000, and the provisions are indexed for inflation.
We all know that the backbone of business in America are small businesses. They provide in my State 85 percent of the employment. They are 99 percent of the businesses. So this is something I really am so pleased to have the support of the National Federation of Independent Businesses. We have excellent groups like NFIB which are letting Americans know how beneficial this will be.
There is another business investment incentive and that is the net operating loss carryback which will extend the net operating loss carryback for 3 years, 2003 to 2005, and holds taxpayers harmless for the alternative minimum tax.
Finally, another provision which will be voted on tomorrow is the dividend and capital gain tax reduction. This will reduce the tax rate on dividends and capital gains to 5 percent to taxpayers in the lowest tax bracket, and to 15 percent to all other taxpayers.
I had an opportunity yesterday to meet Rick Wagner, who is the CEO of General Motors. In his presentation he indicated that there would be an increase in the value of the stock market of between 6 to 15 percent. This is hundreds of millions of dollars, billions of dollars which will benefit the American public.
In fact, the dividend reductions in taxes, a majority of that are for the senior citizens of the United States. So I am so pleased that Mr. Wagner, who is building a home in Daufuskie Island in South Carolina, we welcome somebody who has been such an aggressive promoter of reducing taxes on the American people and to increase the value of the stock market, to increase and give incentives for more investment, more jobs for the American people.
Those are the facts that are very clear. I know and I apologize if it sounded like I was an accountant, and I love accountants, but the American people need to know the facts. They will hear other information. The bottom line is this is beneficial to the American taxpayer.
Mr. Speaker, I yield to the gentleman from North Carolina (Mr. Hayes).
It is so obvious by the tax breakdown that the gentleman from North Carolina (Mr. Hayes) brought out and the points he brought out that we need to be promoting, as the President is doing, the jobs and economic growth plan. I want to quote the President's speech in Little Rock this week. He has clearly indicated that by growing the economy, that is how you reduce the deficit, not by spending more money, as the gentleman correctly indicated the other side is truly proposing, but to grow the economy. His direct quote was, ``In order to offset any deficit, you've got to have more revenues. The best way to have more revenues is to encourage economic growth. The more economic growth there is, the more people are working, the more likely it is that you're going to get more revenues into the Treasury of the United States, and also to the individual States. I'm concerned about the deficit but I'm first
and foremost concerned about that person looking for a job.'' That is what President Bush said this week in Little Rock, Arkansas. I am so proud that he has correctly identified what the gentleman just identified.
I had the great privilege of serving the people of South Carolina for 17 years in the State senate. In fact, the State budget is being debated probably as we speak tonight. I know that instead of just sending money back to the States, we have already had a revenue-sharing experience that did not work and so that is simply spending more money. What we need to do is what the President has proposed and, that is, create new jobs, create new opportunities for people to have incomes.
I know that in South Carolina, we are very proud about the expansion of Michelin Tire Corporation in Lexington, South Carolina. There are three plants there producing wonderful jobs and wonderful tires for the people of America. We have worked hard in our State to attract foreign economic investment. We are very proud that in Spartanburg in the community of Greer that we have the BMW facility. All Z-3s in the world are made there, the X-5s. Every time I have had the opportunity to travel, I have been very proud to know that we have had the economic expansion of BMW in our State providing jobs. That is what we are trying to do in the bill tomorrow with H.R. 2, and, that is, to encourage economic investment in the United States, to provide jobs and to give families the ability to spend their own money.
This does indicate that under unemployment insurance, that the States have received $8 billion. This is from Federal funding. In 2002, only $2 billion of that was actually used. There was a surplus apparently of $6 billion. The bottom line is by creating jobs, what we are doing in the plan that we will be voting for tomorrow, we are providing for additional State revenue by sales tax. That is virtually a universal tax in the United States at most State levels and, that is, by providing for an increase in income, by a person having the ability to keep their own money, when they go to the store and buy products, when they are at Wal-Mart as I frequently am, that with the sales tax, that goes straight to the State. It goes for schools.
Additionally, I am so pleased that this package includes a reduction in the capital gains tax. I can tell the gentleman from firsthand experience, until 16 months ago I was a real estate attorney. I know that by reducing the capital gains tax, and this has been a cause of the chairman of the Committee on Ways and Means, the gentleman from California (Mr. Thomas), for a number of years. By reducing the capital gains tax, this will help again create jobs. The first thing that will occur, because I ran into it, a number of people that I know, particularly elderly people, would not sell property they have, real property, because they felt like they were being overly taxed and they considered it an insult, whatever the percentage was. So by reducing it to 5 percent, what will occur is that people who are currently holding on to property simply because they do not want to pay a capital gains tax, they will sell that property. When they do sell the property, the first occurrence will be construction. I met with the homebuilders association this week. They are very supportive.
The AGC and the ABC, the various construction interests, are very pleased that if we can have a sale of property and the construction, the jobs are created. This also is going to benefit local governments and State governments in that having a turnover of real property, the taxes that are generated will go for schools. They will go for the services of local governments. This is going to be so beneficial because many people in our State, and I think this is true in other States, too, they will actually put goats or they will put a cow on some extraordinarily valuable property in the middle of an urban area. That is because they are able legitimately to qualify for an agricultural assessment.
When they get an agricultural assessment, they may pay $10 in taxes on that particular tract of land. But by having the reduction in the capital gains taxes, by having the sale of the property, by having the development of that property by construction of new businesses or homes, that will generate thousands of dollars, instead of $10 to the local governments, that can be used to build schools, to address the problems that we have in local government, that we have to produce the best schools that we can for our citizens. There is just so much positive in the bill that we will be voting on tomorrow.
I know that the gentleman probably has another question that he wants to ask me.
Mr. Speaker, I want to conclude with some other points real quickly, that is, that the President's jobs and economic growth plan is designed to strengthen the economy by allowing Americans to keep more of their own money to spend, save, and invest by creating jobs. The President's plan to cut taxes and hold the line on government spending would grow the economy and ultimately reduce the deficit as stronger economic growth and job creation causes revenues to rise to meet the restrained level of spending.
At this time, too, I would like to, as we are concluding, indicate the various groups that are supportive of the bill tomorrow, H.R. 2. In fact, I would like to read a letter which was sent by the Tax Relief Coalition. There are hundreds and hundreds of organizations, in fact there are over 1,000, that are supporting the Jobs and Growth Tax Act of 2003. This is a letter again sent by the Tax Relief Coalition:
``On behalf of the more than 1,000 organizations and 1.8 million businesses of the Tax Relief Coalition, we urge you as a member of Congress to support the full elimination of the double taxation of dividends, the increase in the small business expensing allowance, and the acceleration of all the scheduled income tax rate reductions when the Committee on Ways and Means considers the economic growth reconciliation legislation. As companies and organizations representing businesses that employ tens of millions of Americans, we believe these provisions are necessary if we are to jump-start the economy and put people back to work.
``The full elimination of the double taxation of dividends within the framework of a $550 billion tax relief package is achievable and will have a singularly positive effect on the economy in both the short term and the long term. It will spur consumer spending by putting more money in the hands of shareholders who will pay less in taxes, receive higher dividend payouts and accumulate increased wealth as a result of the upward pressure on stock prices. The resulting increased demand and lower cost of capital will sustain economic growth and create jobs as companies invest in the new equipment, build new plants and develop new products. Many economists also believe eliminating this double tax will boost the stock market from 10 to 20 percent.
``Since small businesses create two-thirds of the new jobs in the United States, the importance of the small business provisions of the President's proposal should not be underestimated. Approximately 85 percent of small business owners file tax returns as individuals and represent nearly 80 percent of the taxpayers at the top income bracket. Accelerating all of the scheduled income tax rate reductions to this year, 2003, will provide approximately $10 billion in tax savings to small businesses that file as individuals. Allowing small business owners to expense critical investments will facilitate economic expansion, so we urge you to support raising the small business expensing limit from $25,000 to $75,000 and indexing it for inflation. These changes will create savings for small businesses that will put money directly into the economy and create new jobs.
``Any proposal that does not include the critical small business provisions and result in the full elimination of the unfair double taxation on dividends will significantly compromise the economic benefits of the President's package and jeopardize the hundreds of thousands of new jobs that would otherwise be created.
``In our view, representing tens of millions of working Americans and businesses, if you do not include the dividend tax reduction and the critical small business provisions, the jobs and growth package will simply not have the same effect.
``This has been respectfully submitted by the Tax Relief Coalition.''
Mr. Speaker, I am just very honored to have been here tonight with the gentleman from North Carolina to present on behalf of nearly 1,000 business associations, businesses and other think tanks that are proposing that we reduce taxes and the tax burden on the American people. I just cannot wait until tomorrow, and I hope the American people follow the debate. I am confident that just as we had the debates following the tax increases of 1993, which when those tax increases were put in place that we heard were so good tonight, the immediate effect was that a Republican Congress was elected for the first time in over 40 years.
And so people do understand these issues. I know in the State of South Carolina that we understand those issues because, in fact, not only was there a new Republican majority in the House here in Washington, but for the first time since 1877 there was a Republican majority and the first Republican Speaker of the House of Representatives in the entire South, David Wilkins, was elected. The American people do understand these issues. We have gotten excellent leadership in our State and here in Washington. The Republicans then achieved a majority in the State Senate in 2001 for the first time since 1877 because people do understand the philosophical differences between the two parties. They understand that we as Republicans are working for limited government, expanded freedom. On the other side, they have tax-and-spend policies. They are well meaning, but they are wrong.