Congressman Aaron Schock (R-IL) issued the following statement in support of H.R. 8, the Job Protection and Recession Prevention Act and H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012.H.R. 8 would block the scheduled tax increases at the end of the year by extending current income tax rates for one year; whileH.R. 6169 would expedite consideration and completion of a tax reform package in 2013 by the House and Ways and Means committee, on which Congressman Schock serves. Congressman Schock is an original co-sponsor and worked on both H.R. 8 and H.R. 6169. The full House will vote on these two measures next week,
"The responsible step to take is to extend all the tax rates for one year so we can finish our work on comprehensive tax reform. This will provide certainty for individuals and small businesses so they have the comfort in knowing their taxes will not be going up at the end of the year while we continue our work on tax reform. The economy is still very fragile, and it's widely agreed upon by both sides that the last thing we need to do is to increase the tax burden on anyone.
"For example, the tax rates for investment income will skyrocket from 15 percent to nearly 24 percent should the rates not be extended, thwarting private sector investment. Dividends will go from a 15 percent to close to a 40 percent tax rate, thus reducing retirement stipends for many seniors, and tax rates on the lowest wage earners will grow by 50 percent.
"While preventing these massive tax hikes from being enacted in the short-term, the focus in the long-term is the continuation and completion of overhauling the US tax code. Since January of 2011, Democrats and Republicans on the Ways and Means committee have held 23 hearings on reforming our tax code and will continue to do so throughout this year and into 2013.
"The reform legislation I am working on will lower the corporate tax rate to 25 percent to incentivize employers to locate and hire here in the U.S. It will eliminate the six tax rate categories for personal income and replace them with two: 10% and 25% for individuals. By reforming our tax code, we can throw out the 70,000 pages of tax code, no longer have the highest business tax rate in the world, and lower the individual rates; making the tax code fairer, simpler, and reducing the yearly tax obligations for everyone."
Background on H.R. 8 -- Job Protection and Recession Prevention Act
(Source: House Ways and Means Committee)
H.R. 8 provides a one-year extension of the low-tax policies originally enacted in 2001 and 2003 and then extended again in 2010. Read the full bill text here.
This extension serves as the bridge to tax reform in 2013 and would do the following:
· Maintain existing tax rates and thus prevent a tax hike on January 1, 2013,
· Continue marriage penalty relief,
· Maintain the $1,000 child credit,
· Maintain a 15% top rate on dividends and capital gains,
· Maintain the estate tax at its 2011 and 2012 parameters (indexed for inflation),
· Provide higher Sec. 179 small business expensing limits,
· Preserve certain education-related benefits; and
· Provide a two-year AMT patch. (covering 2012 and 2013)
Background on H.R. 6169 -- Pathway to Job Creation through a Simpler, Fairer, Tax Code Act of 2012
H.R. 6169 provides a pathway to comprehensive tax reforms in 2013. By implementing expedited procedures, this bill will enable lawmakers in both the House and Senate to overcome multiple technical hurdles that often cause bills to languish during the legislative process. Read the full bill text here.
H.R. 6169 would protect taxpayers by creating a fairer and simpler tax code for individuals and families by doing the following:
· Lowering marginal tax rates and broadening the tax base,
· Eliminating special interest loopholes,
· Reducing complexity in the tax code,
· Repealing the Alternative Minimum Tax (AMT),
· Reducing the tax burdens imposed on married couples and families.
H.R. 6169 would make American workers and businesses more competitive by doing the following:
· Creating a stable, predictable tax code under which families and employers are best able to plan for the future,
· Keeping taxes on small businesses low,
· Reducing America's corporate tax rate,
· Transiting to a globally competitive territorial tax system,
· Minimizing the double taxation of investment and capital.
Background on House Expedited Procedures:
· A "tax reform bill" must be introduced in the House of Representatives by the chair of the Committee on Ways and Means no later than April 30, 2013.
· The tax reform bill must be certified by the Joint Committee on Taxation and must include the following:
o A consolidation of the current 6 individual income tax brackets into not more than two brackets of 10 and not more than 25 percent,
o A reduction in the corporate tax rate to not greater than 25 percent,
o A repeal of the Alternative Minimum Tax,
o A broadening of the tax base to maintain revenue between 18 and 19 percent of the economy,
o A change from a "worldwide' to a "territorial' system of taxation
· All relevant committees, including the House Ways and Means committee, will consider the legislation,
· The House will then consider the bill and vote on the final Tax Reform Bill.
· Upon passage in the House, the legislation will be sent to the Senate for consideration under expedited consideration rules.