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Ryan Votes to Grow Economy, Create Jobs

House Passes Tax Relief Legislation to Pump $200 billion into the Economy, Create Over a Million New Jobs by End of 2004

WASHINGTON – Today First District Congressman Paul Ryan voted to support legislation that would create more jobs for America’s workers and spur a more robust economic recovery.  The House of Representatives passed this legislation - H.R. 2, the Jobs and Growth Tax Reconciliation Act of 2003 – by a vote of 222-203.     

This legislation is expected to create 1.2 million new jobs and pump $200 billion into the economy by the end of 2004.  The package contains incentives for businesses to invest, grow and hire more workers, including accelerated depreciation and increased small business expensing. 

It also speeds up the implementation of the tax rate cuts scheduled to take place over the next several years, boosting Americans’ take-home pay and helping numerous small-business owners.  According to the National Federation of Independent Business, at least 85 percent of small-business owners file their tax returns as individuals. 

In addition, the bill’s tax rate cut on both dividend income and capital gains will provide relief for the 50 percent of Americans who are invested in the market, as well as the 70 million Americans who own their homes.

“In Wisconsin and around the country we need a stronger, faster economic recovery that brings more jobs for our workers,” Ryan said. “The key to getting there is investment.  Investment has lagged for the past two years, and we need to turn that around.  This tax package will encourage more businesses to expand, buy equipment and hire more people.  On top of this, speeding up the tax rate cuts helps our area’s small businesses and means families get to keep more of what they earn.”

“And by lowering the tax on capital gains and dividends, this legislation will help families who are invested in the stock market and have been hurt by the economic slowdown,” Ryan said.  “Now that so many Americans depend on these investments as part of their retirement savings or savings for their children’s education, this tax relief has a broad impact.  And it spurs more investment to boost stocks and help businesses grow and create jobs.”      

The Jobs and Growth Tax Reconciliation Act of 2003 contains the following provisions:

Acceleration of 2001 Tax Relief for Individuals

·        Individual rate cuts – Accelerates the 2006 individual rate cut schedule to 2003.  (Rates reduced from 28% to 25%; 31% to 28%; 36% to 33% and 39.6% to 35%.)

·        10 percent bracket – Accelerates the expansion of the 10 percent bracket for 2003, 2004, and 2005.

·        Marriage penalty relief – Accelerates the expansion of the 15 percent bracket and the increase in the standard deduction for married persons filing joint returns for 2003, 2004, and 2005.   

·        Child credit – Increases child credit to $1,000 for 2003, 2004, and 2005.

·        Increases individual AMT exemption amount – Increases the AMT exemption amount by $7,500 for single persons and $15,000 for joint filers for 2003, 2004 and 2005.

Business and investment incentives

·        Bonus depreciation – Increases bonus depreciation from 30 percent to 50 percent and extend through December 31, 2005.

·        Small business expensing – For 2003 through 2007, increases the amount that small businesses can expense (immediately deduct) from $25,000 to $100,000.  Alters definition of small business from $200,000 of capital purchases to $400,000.  Provisions are indexed for inflation.

·        Net operating loss carryback – Extends the 5-year net operating loss carryback for three years (2003 through 2005) and holds taxpayers harmless for AMT.

Dividends and capital gains

·        Dividend and capital gain tax rate reduction 5/15 – Reduces the tax rate on dividends and capital gains to 5 percent for taxpayers in the lowest tax brackets and to 15 percent for all other taxpayers.

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