Dear Member of Congress:
On behalf of the 362,000 members of the National Taxpayers Union, I write to strongly endorse the Economic Recovery and Middle-Class Tax Relief Act.
While some in Congress are considering spending upwards of $1 trillion on government programs and projects, our members know this would be a grievous mistake. Shifting money from individuals to government programs (many with questionable performance records) will not "stimulate" sustainable economic growth. Government spending doesn't create wealth; it either redistributes or destroys it.
The best way to jump-start the economy is through immediate tax relief for American families and businesses. Reducing the tax burden now on individuals and institutions will ensure long-term economic prosperity later. Among the pro-growth, pro-simplification, and pro-taxpayer policy changes included in the Economic Recovery and Middle-Class Tax Relief Act:
For Individuals and Families:
- Provide every income tax bracket with a rate cut of 5 percent;
- Increase the child tax credit from $1,000 to $5,000;
- Repeal the hated Alternative Minimum Tax;
- Make the lower capital gains/dividends tax rate of 15 percent permanent;
- Repeal mandatory distribution rules for retirement accounts;
- Increase tax deductions for student loans and education expenses; and
- Make all withdrawals from retirement accounts tax- and penalty-free during 2009.
For Businesses and Entrepreneurs:
- Align the corporate tax rate with international competitors by cutting it from 35 percent to 25 percent;
- Allow immediate expensing for business purchases;
- Index the cost basis for capital gains to inflation;
- Extend the 15 percent capital gains tax rate to corporations;
- Make permanent the tax credit for research and development; and
- Extend the carryback period for net operating losses to seven years.
Unlike other approaches, the Economic Recovery and Middle-Class Tax Relief Act contains no new spending and would apply a sensible across-the-board reduction of one percent to all FY 2009 discretionary spending (excluding defense, military construction, and veterans affairs).
Roll call votes on the Economic Recovery and Middle-Class Tax Relief Act, along with votes on costly spending bills, will be heavily weighted in National Taxpayers Union's annual Rating of Congress.