Three bills would help get economy back on track
On the opening day of the new 111th Congress, I introduced a trio of bills that focuses on my top legislative priority for the coming year: getting our economy back on track.
Families and businesses are getting hit on all sides by the current economic crisis. With home prices falling, layoffs increasing, credit drying up, retirement accounts shrinking and consumer spending diminishing, we are in the midst of a perfect storm. While the causes and consequences are broad and diverse, the solution comes down to the fundamental need to restore economic growth. A growing economy means new jobs, a robust housing industry and a more secure financial future for working families and retirees. My opening day legislative package aims to put us back on that path.
The centerpiece of this plan is the Fair and Simple Tax (FAST) Act, H.R. 99. I introduced this legislation in the previous Congress, and it remains my long-term goal for economic revitalization. The FAST Act would dramatically simplify and reduce the tax burden on Americans.
By creating a simple, one-page tax form that retains the child credit and all major deductions, like mortgage interest, it would make the annual tax-filing nightmare far more manageable. It would cut the number of tax brackets in half, with three simple levels of taxation - 10 percent on the first $40,000 in income, 15 percent on incomes between $40,000 and $150,000, and 30 percent on any income above $150,000. This would significantly reduce the burden on taxpayers at all income levels.
The FAST Act would also eliminate the death tax, fix the Alternative Minimum Tax and reduce the tax on individual capital gains and corporate incomes. Finally, this bill would create new incentives for investment, personal savings, continued education, retirement plans and health savings.
This is a comprehensive plan that would overhaul our tax code so that it encourages growth, rather than hinders it. It will enable families to better provide for their futures and enable companies to create new opportunities. Ultimately, I hope to see these kinds of broad-based, transformative reforms enacted.
But this is a long-term goal. As we work toward comprehensive reform, we must also pursue more immediate and targeted solutions to jump-start our economy. That's why I introduced two additional pro-growth bills - aimed at the housing industry and the auto industry.
The Economic Recovery Through Responsible Homeownership Act, H.R. 101, would create new tax incentives for responsible home purchases. Those who make a down payment of 5, 10 or 15 percent will get a tax credit of $2000, $5000 or $10,000, respectively. The housing crisis is at the root of our economic crisis. We need to encourage new purchases to stabilize the market, stop the free-fall in prices and restore the communities that have been plagued by foreclosures. But because irresponsible homeownership is partly to blame for the crisis in the first place, only a plan that rewards responsible action will succeed. This bill accomplishes both objectives.
I have also introduced the Commonsense Auto Recovery (CAR) Act, H.R. 100, to provide a boost to our ailing auto industry, without resorting to another bailout. The CAR Act draws on the same principle as my housing bill and creates a tax credit for car purchases equal to the amount of the sales tax on the purchase. Any individual or small-business owner is eligible for the credit. This is an important component of my pro-growth plan because the auto industry touches so many parts of our economy and work force. The manufacturers, dealers, auto-parts makers and financiers - many of whom are small businesses - are all a part of the broad-based auto industry that has weakened considerably in this economy. Thousands of jobs have already been lost, and thousands more are threatened. An effective and sustainable way to boost the industry is to encourage Americans to get back to their local car dealerships.
Addressing the immediate challenges of the weak housing and auto industries will provide a quick boost to our economy. These are critical short-term steps that must be taken. In the long run, we must act on the need for fundamental reform of our tax code to reduce the burden on families and businesses and simplify the tax-filing process.
We cannot restore our economy without both a short-term and long-term view.
The package I put forward is a comprehensive approach that can draw strong support from both Republicans and Democrats. A problem as big as our economic crisis simply cannot be solved without a strong, bipartisan effort. I have had the privilege of working closely with my colleagues in the San Gabriel Valley and Inland Empire in a bipartisan way on a variety of key issues, and look forward to finding new areas of common ground as the 111th Congress pursues an economic recovery agenda.
