John Boehner: GOP has better stimulus ideas
Thursday, January 29, 2009
As some leaders in Washington plot how best to spend your tax dollars on bloated government programs, House Republicans have developed a plan to put money back in the hands of American families, small businesses, entrepreneurs and the self-employed. The latest spending package being discussed is already at $825 billion with some pushing for it to go over $1 trillion. But this isn't our money we're spending – the money will come from our children and grandchildren, and I believe this is simply too much to put on their backs.
The goals of any economic recovery package should be job creation, job preservation and spurring consumer spending. We need to let people keep more of the money they earn. We need to lower tax rates so that families and businesses can invest their money or save it, both of which are good for our economy.
But investing a trillion dollars in government spending isn't going to get our economy back on track. In fact, a recent analysis by the Congressional Budget Office casts doubt on whether the congressional Democrats' spending plan will actually have an immediate impact, which is the true test of any economic recovery proposal. Just 7 percent of the proposed infrastructure spending — $26 billion out of $274 billion – would be funneled into our economy by the end of this budget year in September. Worse, just one in seven dollars of a massive $18.5 billion expenditure on "energy efficiency" and "renewable energy programs" would be spent within the next 18 months. And plans to bring broadband Internet service to rural and under-served areas will take years to implement.
Repairing aging infrastructure such as bridges and roads and bringing new technology to rural residents are fine programs, but they're not going to create either the short-term economic conditions necessary to pull us out of the current recession. President Obama asked House Republicans for our ideas on how to help our economy, and we formed a working group to develop our proposals.
Immediate tax relief
for working families
The fastest way to get money back into the pockets of working families is to lower taxes, allowing them to keep more of what they earn. The two lowest tax rates in the U.S. are 10 percent and 15 percent; 45 million married couples and 13.5 million heads of households pay at the 10 percent rate while nearly 40 million married couples and 7.7 million heads of households pay at the 15 percent rate. House Republicans propose lowering these tax rates from 15 percent to 10 percent and from 10 percent to 5 percent, which will immediately put money where it will do the most good: In the hands of working families. Under our proposal, every taxpaying-family's gross income will increase by $500 for those in the current 10-percent bracket and $1,200 for those in the current 15-percent bracket.
Help for America's
small businesses
Small businesses (those employing less than 500 individuals) employ about half of all Americans and in 2005, they created nearly 1 million net new jobs – or put another way, small businesses created 78.9 percent of all new jobs. Yet these economic engines can pay up to 35 percent of their income in taxes to the federal government.
The U.S. is ranked 29th out of 30 among the major economies in the world for our business tax rate; only Japan taxes its companies more harshly. House Republicans propose allowing small businesses to take a tax deduction equal to 20 percent of their income, which will immediately free up funds to retain current employees and hire new ones.
No tax increases to pay for spending
Congressional Democrats' proposal includes record levels of government spending that will substantially increase the current deficit. House Republicans are concerned that this level of spending will result in some proposing near-term tax increases on American families. In fact, House Speaker Nancy Pelosi, D-Calif., was recently quoted in the Washington Post (Jan. 8) stating that she'd like to see tax hikes "as soon as possible."
House Republicans are insisting that any recovery package include a provision precluding any tax increases now or in the future to pay for this new spending. House Republicans believe that any spending should be paid for by reducing other government spending, not raising taxes.
Assistance for
the unemployed
Unless you've received or are currently receiving unemployment benefits, you probably don't know that the federal government taxes these benefits, forcing people to give up about 11 percent of their benefit. House Republicans propose making unemployment benefits tax-free so people between jobs can have the full benefit of this income to provide for their families.
Stabilizing home values
The first indication that many Americans had that our economy was slipping were reports of falling home values and a stagnant market. Now the real-estate market is frozen as potential buyers wait for prices to fall even more, and as sellers watch and wonder how much lower prices will go. To encourage the kind of buying-and-selling activity we need to jump-start our economy, House Republicans propose a home-buyer's credit of $7,500 for buyers who can make a minimum down-payment of 5 percent.
U.S. House Minority Leader John Boehner, R-West Chester Twp., represents Ohio's 8th District.
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