Anniversary Notes Benefits of Tax Relief

ANNIVERSARY NOTES BENEFITS OF TAX RELIEF

Crapo joins event marking economics of capital gains, dividend changes

Job creation, low unemployment rates and a surging economy can all be traced back to events four years ago, which lowered tax rates on investment, according to Idaho Senator Mike Crapo. Crapo was part of an event on Capitol Hill this morning marking the four-year anniversary of legislation, which lowered tax rates on capital gains and dividends. He has introduced legislation (S. 502) to make the tax reductions permanent. Representative Eric Cantor (R-Virginia) is introducing a similar bill today in the U.S. House.

"Since Congress lowered the tax rates on capital gains and investment to 15 percent and five percent for lower-income brackets, our economy has grown by more than three percent annually compared to just one percent before the bill was passed," noted Crapo, a member of the Senate Finance Committee with jurisdiction over financial issues. "This tax relief is encouraging investments, and we have created more than 7.8 million jobs. Unemployment is at 4.5 percent, down from six percent in 2003. Idaho's unemployment rates are even lower.

"We are still awaiting the final conference report on a budget blueprint, but it appears the majority party wants to authorize $150 billion in new spending over the next five years and set a pathway for the tax relief we had approved to be eliminated," Crapo added. "This would be a big step backwards, and it must be stopped. It is clear that tax relief has spurred the economy, created new jobs and cut our federal deficit in half. Continuing this tax relief must be a priority. This tax relief is not just for the rich. I am reminded of an Idaho Falls retiree from the old Ma Bell phone company, who told me she considers those regular dividend checks to be the source of her 'birthday and Christmas money' for her grandchildren. If not for the elimination of the double taxation on dividends, she would not be able to be nearly as generous to her grandchildren."

The Jobs and Growth Tax Relief Reconciliation Act of 2003 was passed four years ago this month. It lowered the tax rates on capital gains and dividends to 15 percent (5 percent for lower income taxpayers, falling to zero percent by 2010). Crapo was asked to participate in today's event marking the anniversary of tax relief because he is the lead sponsor in the Senate of the legislation that will make permanent the 2003 rate reductions on capital gains and dividends.

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