Tax

              Tax reform must be a focal point of our fight to keep the economy growing.  In the next few years, Americans face the largest tax increase in our nation’s history - $3.5 trillion over ten years, or an average annual tax increase of more that $3,000 per household.  This tax increase would be crippling to our economy, straining the budget of every American family, creating a ripple effect on business’ decisions to invest in the United States and stifling job growth.  Democratic leaders in Congress clearly indicated that they not only intend to allow this to happen but that they welcome higher taxes.

            In the 1980’s, President Reagan took the lead on lowering our personal and business taxes.  Without the burden of suffocating taxes, the American people were able to choose how they spent their money and we enjoyed an economic boom because confidence in American investment skyrocketed.  We need similarly bold action to stimulate our economy today.  Our tax system is already wasteful and needlessly complicated.  And it will only worsen if the Democratic Majority gets the tax increases they are pushing for.

            I support the following common-sense tax reform measures to give Americans more control of how they spend their own hard earned money.

• Preventing the looming record tax increases by making the 2001 and 2003 tax relief permanent.  That tax relief is set to expire in 2010 unless Congress acts.  If the Majority party has their way, we will see the return of the marriage penalty, a 50% cut in the child tax credit, and a resurrection of the “Death Tax.”  We can avoid these fundamentally unfair tax hikes simply by making this pro-growth tax relief permanent.

• Cutting the corporate tax rate to increase American entrepreneurship.  Along with the record personal income tax increases, the United States corporate tax rate, currently 35% (and nearly 40% when state taxes are factored in), is the second highest in the developed world.  America’s position as the world’s economic leader is at risk because many foreign countries offer a much more hospitable environment for business investment.  If we don’t lower this rate, American jobs and economic stability are in jeopardy of moving to countries with lower rates.  Lowering the corporate tax rate would spur economic growth and job creation across the board.

• Simplify the tax code.  When more than 60% of Americans have to hire a professional to prepare their tax return, it’s a clear sign that our tax system has become far too complicated.  Although there is tremendous disagreement about the best way to reform the system, I believe a bill called the “Taxpayer Choice Act” is a good way to start.  This legislation would allow each taxpayer to choose whether to file under the current system or a greatly simplified two-rate flat tax.  Along with fundamental reform for individuals, we must repeal the alternative minimum tax, (AMT), which threatens to significantly raise taxes on millions of middle-class households.  This tax, originally designed for the 150 wealthiest individuals in the 1970’s now threatens to affect more than 24 million people due to inflation.

• Eliminate double taxation on investment.  We must also eliminate the disincentive to saving and investment created by our capital gains and dividends tax system.  In addition to skewing investment decisions, taxes on capital gains and dividends represent a second tax on American individuals and companies.  I have introduced legislation to eliminate this unfair double tax.    

I firmly believe that Americans know how to spend their money better than Washington politicians.  Since I was elected to Congress, I have always stood by the bedrock principle that when we as Americans have our economic freedom, we can best grow our economy.  By reducing the oppressive tax burden on the American people, fighting against the looming Democratic tax increases, and instituting a fundamentally fair tax code, we can begin strengthen our economy and maintain our future competitiveness.