President Bush is at it again.
Two years ago he presented a tax relief plan that Congress ultimately passed with a large bipartisan majority. It was implemented in a timely manner to stem the economic bleeding of a recession and put the economy on a path to recovery. It was a plan that helped lighten the tax burden on a broad spectrum of American taxpayers, giving highest priority to low-and- modest income families.
Now he has proposed another economic stimulus package, based on further relief for all Americans who pay income taxes, picking up right where the last one left off. It is a plan intended to promote and create more and better jobs, boost the economy with more consumer spending, promote more saving and investment, and leave families with more disposable income after they pay the tax man. It is a plan headed toward Capitol Hill for consideration. Thanks to the November 2002 elections, it is a plan that no longer faces a Senate under the control of a Democratic Leadership clique that stonewalled other, similar proposals to shore up the economy after the 9/11 terrorist attacks. The new Republican majority in Congress will give it fair and serious consideration.
It is important, and a basic matter of fairness, to consider tax relief today. Even after enactment of the 2001 tax bill, this remains the most heavily-taxed generation in American history. We have the opportunity now to ensure that individuals and families Americans keep more of their hard-earned money and decide how to use it to meet their needs.
President Bush is proposing to accelerate into January 2003 the tax rate reductions currently scheduled to take effect in 2004 and 2006. This means less money would be withheld from paychecks immediately, not years from now, giving workers an extra boost on payday. The proposal also would give a much-needed lift to middle income families by accelerating marriage penalty relief and the child credit increase into 2003.
The standard deduction for married couples would be set at twice the amount for single filers, and the child tax credit would increase $400 per child to a total of $1000. What does this mean in real terms? A two-parent household working to support two children on $39,000 a year, would receive $1,100 in tax relief. Nearly 115,000 Idaho families stand to gain from the increased child tax credit, which means there will be more money in the family budget for food, clothing and other important items.
The plan would put a stop to the unfairand indefensiblepractice of double- taxing dividend income. Many senior citizens, especially, have put much of their life savings in stock that provide a small but reliable dividend income. These seniors on fixed incomes should not be punished for having made a safe, sound, honest investment. Currently the government taxes a business on its income, and then it again taxes the shareholdersmost of whom have modest incomeswhen they receive dividends from the company's after-tax income. For a dollar of after-tax business income shared with stockholders as a dividend, often as little as 40 cents actually reaches the individual shareholder. Current law prevents 35 million American households from receiving the full amount of dividend income their savings have earned.
The President is also looking to provide relief for small business owners, the main driving force of our economy, by increasing expensing limits from $25,000 to $75,000. This would encourage small businesses to invest in more equipment needed to expand their services. With this expansion comes the need for more workers, and this demand also improves wages. For unemployed Americans, this package complements the extension of unemployment insurance just approved by Congress and the President, by boosting new employment.
The President's plan is bold, yes but it's also balanced. It does not focus attention solely on one group or the other, but rather shares relief in a proportional manner to those who contribute to this country through income taxes. Not only would it allow Americans to keep more of their own money, it would pressure the federal government to practice fiscal responsibility when spending taxpayer money, without diverting one dollar from Social Security or Medicare.
Just as American families have to budget their household income, the federal government should be expected to balance its checkbook. I have always felt strongly about this, which is why the first piece of legislation I introduced in the new 108th Congress is a proposed Balanced Budget Amendment to the U.S. Constitution. The President's tax plan, coupled with decreased spending by Washington, DC, is the right medicine for a still-struggling economy.
We proved in June 2001 that working Americans keeping more of their own money is a powerful tool in promoting a strong economy. Even after taking a tremendous hit from the terrorist attacks and 9/11 and the War on Terrorism, our economy is still standing on fundamentally firm ground. It is now time to build on that foundation and the President's plan will help get us there.