Tax reductions generate strong economic growth. They enable Americans to save, invest and spend more of their income. This creates a business environment that rewards creativity and innovation.
Reducing taxes is a question of fairness. It is not fair to punish those who create jobs with high tax rates. It is not fair to let the current tax code suffocate our economy.
History tells us reducing taxes across-the-board helps the economy grow. Tax relief worked in the 1980`s, it worked in the 1990`s, and it will work again now.
The House explored numerous options to achieve the President's top priority of creating more jobs. We found a way to fit the president's plan into a new budget target while maintaining the primary objective of creating jobs and growing the economy.
The Jobs and Growth Tax Act of 2003 includes all of the elements outlined by the President for his jobs and growth package: acceleration of individual rate reductions, marriage penalty relief, child care tax credits, small business expensing and a dividend tax reduction.
According to an analysis by the Heritage Foundation, the bill creates approximately 1.2 million jobs by the end of 2004. The total includes 42,000 jobs in Texas. In addition, it will lead to sustained economic growth and inject $200 billion into the economy to help drive consumer spending and job creation.
Dividend relief is a key goal. The House Republican plan promotes investment by reducing the tax on capital gains. These modifications simplify the tax code, while creating similar tax treatment for both capital gains and dividends.
Eighty-four million or over 50 percent of adult Americans are invested in the stock market and over 70 million Americans own a home. Reducing the tax on dividends and capital gains to five percent for the lowest two tax brackets and 15 percent for the remaining brackets, putting dollars back into the pockets of millions of families. This provision will not only increase economic growth, but increase incomes for working Americans.
Seniors, who tend to own a larger share of stocks than other age groups, including a disproportionate share of dividend paying stocks, will benefit greatly from the much-needed tax relief.
Our economy needs tax relief. We need to create more jobs and the best way to help companies, investors and entrepreneurs to create good, private-sector jobs is to reduce taxes across-the-board. And the best way to refuel the economy and keep Texas competitive and growing is to reduce taxes. Jobs must come first.