Dear Member of Congress:
In light of recent discussions concerning a revived Stimulus 2 bill, I would like to remind you that on September 9, 2008, more than 40 groups representing millions of taxpayers sent an open letter initiated by the National Taxpayers Union urging Congress to "reject a massive increase in government spending disingenuously disguised with a 'Stimulus 2' moniker." Our members know that government doesn't create wealth; it either redistributes or destroys it. Shifting money from individuals to government programs (many with questionable performance records) will not "stimulate" sustainable economic growth.
In a disturbing development, the pre-bailout House stimulus bill (H.R. 7110) gave spending priority to projects that "can award contracts based on bids within 120 days of enactment." In other cases, it favored "those activities that are labor intensive." Speed and make-work shouldn't be the primary drivers of how taxpayer dollars are spent, and these factors certainly won't foster the growth environment our economy needs to thrive.
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 growth later. Among the pro-taxpayer policy changes that should be made:
- Suspend minimum withdrawal rules for IRAs. No one should be forced to withdraw from their Individual Retirement Account just because they hit a certain age, especially if they'd prefer to wait for a market uptick. This change would address the concerns of older taxpayers, many of whom responsibly planned for their retirements by investing with IRAs.
- Schedule a repatriation period for international profits of U.S. companies at a reduced tax rate. A similar window in 2004 resulted in the repatriation of $312 billion, and repeating the exercise now could inject liquidity into U.S. markets. Lowering corporate income taxes would also help.
- Address the capital gains tax. Congress should suspend the capital gains tax for two years, make permanent the lower 15 percent rate, or at least index the tax for inflation.
- Allow for full and immediate expensing. This would encourage small businesses to invest in the assets (such as equipment and real estate) that could help expand and invigorate operations.
- Lock the 2001 federal income tax cuts into place. Every tax bracket received a rate cut, but those lower rates expire in 2010. Families are already looking ahead to the years when Washington will take more of their money. If they can count on current tax rates, many will be more comfortable investing today instead of fearing the tax man's bigger bite in 2011.
Roll call votes on pro-growth tax policy changes, along with votes on costly spending bills, will be heavily weighted in National Taxpayers Union's annual Rating of Congress.
Sincerely
Kristina Rasmussen
Director of Government Affairs