Cornyn Urges Congress to Make Key Tax Relief Permanent

WASHINGTON—U.S. Sen. John Cornyn a member of the Budget Committee on Tuesday urged Congress to make key tax relief provisions permanent that were passed by the Senate four years ago today:

“Four years ago Congress passed well-timed tax relief that put money back in the pockets of working men and women small businesses and entrepreneurs. This helped the economy bounce back from adversity earlier in the decade. Indeed our economy has roared back.

“We can and should take great pride in the economy’s performance and look with optimism toward the future.

“As we move forward the last thing we should do is reverse the policies that have generated this beneficial economic growth and created so many jobs in America. Unfortunately this tax relief will soon expire resulting in a tax increase for every American taxpayer without a single vote on the floor of the United States Senate.

“Democrats are pushing a budget that includes a $736 billion tax hike for taxpayers over the next five years. Unless this is reversed it will not only jeopardize future economic growth but also the financial well-being of millions of Americans families entrepreneurs and seniors.

“The tax relief we passed was instrumental in growing the economy creating millions of new jobs and increasing government revenues which has greatly reduced the deficit. This policy is the rising tide that lifts all boats. Americans respond to financial incentives. When they know they can keep more of what they earn they work harder. Risk-takers and entrepreneurs invest in ventures that create new jobs and generate interest and revenue not only for them but also for Uncle Sam.

“Four years ago the Senate voted for hope and against fear it voted for progress and against stagnation and it voted for the entrepreneurial spirit and against command-and-control out of Washington. Four years later we all have seen and can celebrate the tremendous results as an outcome of this important legislation.”

The Senate passed the Jobs and Growth Tax Relief Reconciliation Act of 2003 on May 15 2003. The bill accelerated a number of individual and small business tax relief provisions Congress passed two years earlier in 2001. The 2003 Act allowed parents to take advantage of the $1000 tax credit sooner. It accelerated relief from higher marginal tax rates the marriage tax penalty and the alternative minimum tax. The legislation also provided capital gains and dividends tax relief.

Since the law went into effect the economy has grown at an average quarterly rate of 3.5 percent compared to 1.1 percent in the two years prior. Since August 2003 the economy has created more than 7.8 million jobs and unemployment has dropped to 4.5 percent (from 6.1 percent in August 2003). 

In addition the strong economic growth produced by the tax relief Republicans passed has significantly increased revenue to the federal government increasing receipts by nearly 35 percent.  This strong revenue increase has helped drive down the deficit which has declined by $165 billion over the past two years cutting it in half three years ahead of the President’s goal. 

Audio of Sen. Cornyn’s remarks on the Senate floor http://src.senate.gov/public/_files/radio/cornynsenatefloor05_15_07.mp3