Dreier Votes to Approve Jobs and Growth Package

May 9, 2003

WASHINGTON, DC - Calling it a package that will "stimulate and sustain both short and long term growth and as well as lead to more job creation," Congressman David Dreier (R-San Dimas), Chairman of the House Rules Committee, voted today to approve the Jobs and Growth Tax Reconciliation Act of 2003, H.R. 2.

"Our economy needs a jumpstart, and this package will provide it," Dreier said. "It provides rate reductions that will benefit Americans at all income levels, as well as incentives for growth and investment. I'm particularly pleased that this bill includes capital gains relief for America's Investor Class. I have long advocated capital gains tax relief as a sure fire way to grow the economy and increase revenues to the federal government. With passage of this bill today, we are one step closer to getting our economy moving again."

The Jobs and Growth Tax Reconciliation Act of 2003 accelerates tax relief that was approved in 2001. Specifically, the bill will increase the child credit for the next three years, increase the deduction for married persons filing joint returns for the next three years, accelerate the 2006 individual rate cuts to 2003, and increase the individual AMT exemption amount for the next three years. It also provides key investment tax relief through dividend and capital gains tax relief. Under the bill passed today, the tax rate on both dividends and capital gains will be reduced to 5 percent for taxpayers in the lowest tax brackets and to 15 percent for all other taxpayers.

Dreier noted that the investment tax relief will affect millions of families who pay capital gains tax on their holdings, whether they be stocks, mutual funds, or property. "Millions of Americans have recognized that investming is an excellent way to prepare for their futures," Dreier said. "Of the tax returns with capital gains a few years back, 72 percent were from households with incomes of less than $100,000. This proves that the capital gains tax affects moderate income taxpayers. This kind of relief is what's needed to keep Americans invested and helping to grow our economy. "

An added bonus to the economic growth potential of this package, Dreier noted, is the possible increase in federal revenues. "Time and again, reductions in the capital gains rate have increased the flow of revenues to the federal treasury," Dreier said. "We need more revenues in order to work our way out of deficits and pay for important priorities like national defense and education. Economic growth will provide us with those revenues."