Published: 01-24-08
Washington DC – Today House Conference Secretary John Carter (TX-31) a member of the fiscally conservative Republican Study Committee (RSC) co-sponsored the Economic Growth Act of 2008 introduced by the RSC earlier today. The act is designed to provide much-needed incentive-based relief to job creators in order to spur widespread economic growth.“I applaud Chairman Hensarling a fellow Texan on his dedication to producing a bill for an economic growth package that will put our economy back on track. It is clear that stimulating our economy must consist of tax relief for small businesses and middle-class families not increased federal spending that will only burden American families and continue to send our economy on a downhill path” Carter said.
The Economic Growth Package of 2008 contains four major provisions:
• Full Immediate Expensing. The bill would allow all businesses to immediately expense-or fully deduct on their tax returns-the costs of assets (including buildings) they purchase for their business in the year that they buy such assets. Under current law businesses can only take limited deductions in pieces over several years. By uncapping and accelerating the expensing this provision would encourage the purchase of assets with which to grow a business.
• Significant Reduction in the Top Corporate Tax Rate. The bill would immediately cut the top corporate income tax rate from 35 to 25 aligning it with the average rate in the European Union. By allowing businesses to keep more of the money they earn this provision would encourage the expansion of businesses the hiring of more workers and an acceleration of investment while making American companies more competitive internationally.
• End the Capital Gains Tax on Inflation. The bill would index for inflation the cost basis used when calculating the capital gains tax on assets acquired before the end of 2008. Under current law the capital gains tax is based on the difference in the original purchase price of the asset and the sale price of the asset. However some of this difference or “gain” can be attributed to inflation. By effectively reducing the amount of a gain that is taxable this provision would encourage the movement of capital in 2008 and spur voluminous economic investment.
• Simplify the Capital Gains Rate Structure. The bill would allow corporations to benefit from the 15 capital gains rate. Under current law individuals pay a top capital gains rate of 15 but corporations are subject to a 35 top rate. By encouraging corporations to sell unwanted assets this provision would unleash funds and materials with which to create jobs and grow the economy.
• Significant Reduction in the Top Corporate Tax Rate. The bill would immediately cut the top corporate income tax rate from 35 to 25 aligning it with the average rate in the European Union. By allowing businesses to keep more of the money they earn this provision would encourage the expansion of businesses the hiring of more workers and an acceleration of investment while making American companies more competitive internationally.
• End the Capital Gains Tax on Inflation. The bill would index for inflation the cost basis used when calculating the capital gains tax on assets acquired before the end of 2008. Under current law the capital gains tax is based on the difference in the original purchase price of the asset and the sale price of the asset. However some of this difference or “gain” can be attributed to inflation. By effectively reducing the amount of a gain that is taxable this provision would encourage the movement of capital in 2008 and spur voluminous economic investment.
• Simplify the Capital Gains Rate Structure. The bill would allow corporations to benefit from the 15 capital gains rate. Under current law individuals pay a top capital gains rate of 15 but corporations are subject to a 35 top rate. By encouraging corporations to sell unwanted assets this provision would unleash funds and materials with which to create jobs and grow the economy.
