The Heritage Foundation today released a memo detailing the negative impact of the Death Tax and the benefits of repealing it. From the memo:
The death tax is a drag on America’s family-owned businesses, destroys jobs, and lowers wages while raising little revenue. As such, Congress should repeal the estate tax once and for all to remove an unfair burden from the backs of American family-owned businesses and their workers…
Economic Benefits of Full Repeal
A recent study found that a full repeal of the death tax would create 1.5 million jobs. This is half the number of jobs President Obama claimed the $800 billion stimulus package would create–at one-fifth the price.
Additional benefits from full repeal of the estate tax include:
Increasing small business capital by over $1.6 trillion;
Increasing the probability of hiring by 8.6 percent;
Increasing payrolls by 2.6 percent;
Expanding investment by 3 percent; and
Slashing the current jobless rate by 0.9 percent.
The death tax also impedes economic growth because it stands opposed to the principles of virtue, thrift, and savings that made America the strongest nation on earth. For those Americans who think that their estates may one day pay federal death taxes, the death tax increases their incentive to consume their wealth today rather than invest and make more money in the future. Instead of putting their money in the hands of entrepreneurs or investing more in their own economic endeavors, Americans get the unmistakable message to consume it now.
Kill the Death Tax
It is time for Congress to kill the death tax once and for all. Doing so would lift a tremendous weight off the shoulders of America’s family-owned businesses, create jobs for out-of-work Americans, and help the ailing economy.
If the Obama Administration gets it way and passes a value-added tax, America and its economy would be radically changed—and not for the better. The first priority in Washington should be to cut spending, not to add a powerful new weapon to the tax arsenal.
To read the Wall Street Journal article on this issue, click here.
The Oneida Bingo and Casino outside of Green Bay, Wisconsin used a federal grant they received through the Stimulus package, to send their staff to a customer service seminar. The two day seminar was held at a local technical college to teach the casino staff how to handle confrontations with customers. It was clear to the instructors, however, that the casino staff was already well trained at handling confrontations.
With Wisconsin’s unemployment rate at just below 9%, the Federal government chose to spend $67,726 to retrain a casino staff, rather than using the money to create jobs.
Under the House Republican Stimulus Alternative, tax dollars would not have been spent to teach staff something they already knew how to do. Instead, Republicans would have created twice as many jobs at half the cost. To learn how visit: http://republicanwhip.house.gov/Jobs/
Americans who slap $1 pricetags on their used possessions at garage sales or bazaar events risk being slapped with fines of up to $15 million, thanks to a new government campaign.
The “Resale Round-up,” launched by the Consumer Product Safety Commission, enforces new limits on lead in children’s products and makes it illegal to sell any items that don’t meet those limits or have been recalled for any other reason.
Yesterday Jack was on NewsTalk1059 WVGA talking about different legislative issues that are being debated in Congress. He talked about everything from healthcare to Cap and Tax - and even Sarah Palin and President Obama competing in a foot race. You can listen to the interview in it’s entirety by clicking here clicking here.
Today, Speaker Pelosi’s plan to implement a national energy tax is set to be on the House floor. The plan would place a devastating tax on all Americans known as “Cap and Tax” with the intent to reduce America’s carbon emission levels in 2050 to the level emitted in 1910. That’s no easy task when you consider that the population of the United States in 1910 was just 92 million people compared to an estimated 420 million in 2050.
Join more than 130,000 Americans who have signed the petition asking that Congress reject any and all legislation (or regulatory action by the EPA) that would enact new energy taxes and/or establish a national cap and trade system for carbon dioxide that would, as President Obama has said, cause electricity and other energy prices to “necessarily skyrocket”.
Congressman urges constituents to participate in survey
With Tax Day just around the corner, Congressman Jack Kingston (R/GA-1) is seeking input from First District constituents on efforts to reform the tax code. The survey, which can be filled out at http://kingston.house.gov/taxsurvey is designed to educate constituents on proposals for tax reform like the Fair Tax and the Flat Tax.
“All across Georgia and all across America, folks are gathering together for TEA parties,” Congressman Kingston said. “These demonstrate our frustration with an outdated tax code and the burden it places on small businesses and working families. I hope we can turn that frustration into action and get the discussion moving on reforming the tax code to provide for a more prosperous future.”
At a White House press conference today, President Obama and Treasury Secretary Geithner announced a program to inject $15 billion into the small business credit market. While Congressman Jack Kingston (R/GA-1) praised long-awaited attention to small business, he criticized the plan’s failure to address impending tax increases.
“This proposal is a step in the right direction but it’s only a step when small businesses have lost a mile in this economy,” Congressman Kingston said. “By my math, the $15 billion in aid announced today amounts to 2% of the $687 billion in tax increases unveiled in President Obama’s budget the lion’s share of which will fall on the shoulders of small businesses. In effect, for every dollar Washington takes away from small business, they’ll get a whopping two cents back.”
Nation’s oldest taxpayer organization honors congressman for fiscally sound record
Congressman Jack Kingston (R/GA01) today earned the nation’s top tax policy award after being named a “Tax Fighter” by the National Tax Limitation Committee (NTLC). The NTLC, the nation’s oldest taxpayer organization, presented Congressman Kingston with the award for his fiscally sound voting record.
“America owes much of her prosperity to a low tax structure,” Congressman Kingston said. “In order to get out of this economic crisis, I’ll continue pushing for lower taxes. Income redistribution schemes will do nothing more than kill jobs and would signal a new era of socialism in America. I appreciate NCLT’s work and will continue fighting for our shared values of lower taxes and less government interference in our lives.”
The National Tax Limitation Committee scored some 39 House votes, placing special emphasis on tax, budget and spending measures that would have a major impact on long-term taxing and spending programs of the government. Votes were selected to provide insight to the legislator’s philosophy with respect to government regulation, private property rights, federalism and the size of the federal government. Each vote was weighed and tallied to present an accurate “fiscal responsibility” score.
“Congressman Kingston has led the battle on behalf of taxpayers on behalf of taxpayers,” said NTLC President Lewis Uhler. “He has been a major asset to taxpayers across America during his congressional service and has had the courage to challenge the orthodoxy of Washington spending and earmarks. From making permanent the 2001 and 2003 tax cuts, to eliminating the death tax, to killing the Alternative Minimum Tax, and providing incentives for private savings, investment and job creation, Congressman Kingston has earned an ‘A’ grade for taxpayers.”
The National Tax Limitation Committee was organized in 1975 to seek constitutional and other limits on taxes, spending and deficits at the federal, state and local levels of government. NTLC has led the national movement for constitutional tax and spending limits at the state and local levels.
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For more information on Jack’s efforts to lower taxes, click here.
“Let’s remember that those tax cuts brought historic reductions to individual tax rates, death taxes, capital gains taxes and taxes levied on small businesses. They have provided relief to American families by increasing the child tax credit from $600 to $1,000 per child and reducing the marriage penalty by doubling the standard deduction.
“But in 2010, those tax cuts, which spurred growth and created 8.1 million jobs, are set to expire. If they are allowed to expire, we will witness the largest tax increase in American history. Texans would shoulder an average $2,381 increase.
“In light of these alarming figures, there is no justification for raising taxes at this time. Such an increase would only nullify the benefits of Congress’ recent economic stimulus package. Through this stimulus package, qualifying taxpayers who file a 2007 return may expect to receive rebate checks between May and July of up to $600 for individuals and up to $1,200 for married couples filing jointly. Millions of retirees, veterans and low-income workers may also receive a stimulus payment.”
Unless Congress takes action, the following tax increases will automatically occur for the following tax years:
2008
The exemption for the Alternative Minimum Tax (AMT) will decrease from $44,350 to $33,750 for single filers and from $66,250 to $45,000 for married couples filing jointly.
Taxpayers will not be allowed to deduct their state and local general sales taxes from their federal income tax.
Taxpayers will not be able to adjust their income for qualified tution and related expenses.
Businesses will not be able to claim a tax credit for research, experimentation, and development activities.
First-time homebuyers in the nation’s capital will no longer be able to claim a tax credit.
2009:
Taxpayers will no longer be able to claim a tax credit for certain residential energy efficient property, a tax credit for construction of new energy efficient homes, or a tax deduction for energy efficient commerical building property.
2010:
The Section 179 business expensing cap will decrease from $128,000 (plus inflation after 2008) to $25,000, and the starting point for the phase-out of this deduction will decrease from $510,000 (plus inflation after 2008) to $100,000.
2011:
The marginal income tax rates will increase as follows:
35% bracket will increase to 39.6%
33% bracket will increase to 36%
28% bracket will increase to 31%
25% bracket will increase to 28%
10% and 15% brackets will condense to 15%
The capital gains rates for individuals will increase from 15% and 0% to 20% and 10%
Dividends will no longer be taxed at captial gains rates for individuals, thereby increasing the double taxation of dividends by as much as 62%
The standard deduction for couples as a percentage of the standard deduction for singles will decrease from 200% to 167% - restoring the marraige penalty.
The top end of the 15% marginal income tax bracket for couples as a percentage of the top end for singles will decrease from 200% to 167% - restoring the marriage penalty.
The child tax credit will decrease from $1,000 to $500.
The “death” tax using the “stepped up” basis will return with a 55% maximum rate (including surtax) and a $1 million exemption, after years of decreasing “death” tax rates, increasing exemptions, and one year using the “carryover” basis to calculate the tax due.
The same spirit that guided Senate Republicans to block the fatted calf put forth by the Senate Finance Committee should guide all conservatives to work towards blocking the economic “stimulus” which passed the House this week.
The package that lies before us is one that will do nothing to bring about long term growth in our economy. Its effect will be more like the Christmas shopping season that will boost numbers for a quarter, may two, but its far too short sited to serve as an engine of growth.
One important thing to remember is that there is not full agreement that we are even facing a recession. An expert Jack’s been talking to from the University of Georgia likens the “housing crisis” to the burst of the “dot com” bubble in the late 1990s. In his view, the housing market is simply correcting itself which, though it may be painful, will eventually improve the market.With the House in recess for the Democrat retreat, Jack’s had a chance to travel through the district and to other parts of Georgia and there is a consensus growing that a real economic stimulus should focus on a few key tenets. Namely:
Making the 2003 tax cuts permanent. These tax cuts brought unprecedented growth to our economy and should be made permanent. President Bush himself cited them as a growing source of uncertainty looming over our economy. The tax cuts encourage folks to work harder because they know they will keep more of what they make.
Additional tax cuts to drive the economy upward. If we want real economic growth, we need to target tax cuts to encourage Americans to go buy new consumer goods. Many believe that the proposed rebates will primarily be saved or used to buy basic needs both of which do little good for long term economic growth.
Make permanent the depreciation write-offs in the ’stimulus’ package. While the tax breaks for businesses contained in the current proposal are good, they will do little for businesses who are looking to buy equipment for long term use. Many businesses plan far in advance and would need long-term tax breaks to really encourage them to buy anything that market forces would not already encourage them to purchase.
Bring back the investment tax credit. To create more jobs, we need to encourage the American people to pour money into the markets. This is a great time to buy as the uncertainty has caused a dip in the markets.
Last week, I had a chance to take my Journey With Jack when I helped organize an intern-only event, “Better Know the FairTax,” with Reps. John Linder and Jack Kingston of Georgia. This was the second event in Jack’s Summer Intern Series “Better Know the Republican Party.”
(Eds. Note: Apoligies that the audio quality is a little low, but we’re doing the best with what we’ve got!)
