Marchant Co-Sponsors

“The Economic Recovery & Middle-Class Tax Relief Act”

I have received thousands of letters and emails from constituents concerning the economic “stimulus” Speaker Pelosi and liberals are proposing. I support tax cuts and wholeheartedly believe we should and must do all we can to stimulate the economy, but not at a cost of $1 trillion added to our debt. I do not believe that $1 trillion plus in new spending created by printing and borrowing new money on top of a projected $1 trillion plus budget deficit is either fiscally responsible or economically stimulative. The legislation being offered by Speaker Pelosi is a far cry from fiscal responsibility and will not offer the stimulus our economy needs. Rather than controlling spending, her bill is larded up with giveaways, pet projects, and parochial spending. With Speaker Pelosi in full bailout mode, special interest groups are coming out of the woodwork for their share of the anticipated $1 trillion spending “stimulus.”

My priorities for any such proposals are very clear and any such bill approved by Congress should contain no earmarks. Personally, I believe targeted tax cuts are the best – and most proven – way to stimulate the economy. Tax cuts will increase the disposable income of consumers (leading to increased consumer spending) and incentivize businesses to expand their operations and hire (or at least retain) workers. For this reason, I have co-sponsored H.R.470, “The Economic Recovery and Middle-Class Tax Relief Act.” H.R. 470 contains a package of targeted tax cuts that will ignite the ingenuity and entrepreneurial spirit of the American people and American businesses.

Economic Growth Begins with Tax Relief for Working Families:
Authored by my colleague, Congressman Scott Garrett (R-NJ), the bill:
1) Provides for a permanent across the board income tax cut of 5%;
2) Increases the child tax credit from $1,000 to $5,000;
3) Makes all withdrawals from retirement accounts penalty free and tax free during 2009;
4) Permanently repeals the distribution requirements on retirement accounts;
5) Makes permanent the current lower capital gains/dividends tax rate of 15%;
6) Permanently repeals the Alternative Minimum Tax (AMT); and
7) Increases the tax deduction for interest on student loans and the tax deduction for qualified higher education expenses by 50%, and increases the number of individuals and families eligible to claim the full deduction. 

Unleashing American Entrepreneurship with Bold Economic Policy:
In order to regain America’s economic footing, H.R.470 has several components for businesses to rev up our economic engine. The legislation:
1) Cuts the top corporate tax rate from 35% to 25%;
2) Allows all businesses to immediately expense – or fully deduct on their returns – the costs of assets (including buildings) they purchase for their business in the year that they buy such assets (“Section 179” expensing);
3) Extends the carryback period for net operating losses from two to seven years.
4) Makes the Research and Development tax credit permanent;
5) Allows corporations to benefit from the 15% capital gains rate; and
6) Ends the capital gains tax on inflation by indexing the cost basis used when calculating the capital gains tax on assets acquired before the end of 2009;

What’s not in the bill – namely, pork-barrel spending – is almost as important as what is. And to begin the road back to fiscal responsibility, the bill includes a provision cutting non-defense/veterans discretionary spending across the board by 1% for FY ’09. H.R.470 is a bold piece of legislation that puts trust in the American family to spend their own hard-earned tax dollars in ways that will help them best during these tough economic times without worrying about government waste and inefficiency. It also allows small businesses and corporations to weather the current economic climate and actually come out stronger and more optimistic about workforce growth.

I am honored to represent the 24th District of Texas, and appreciate your interest in my e-newsletter.  Please contact my District or DC office with any further questions you may have or visit my website at www.marchant.house.gov.