AMERICAN ECONOMY CONTINUES TO GROW BY LEAPS AND BOUNDS

Friday September 01, 2006

FOR IMMEDIATE RELEASE
CONTACT: Michael Frohlich
202-225-2071

By Rep. Virginia Foxx

On January 11, 1989, in his “Farewell Address to the Nation,” President Ronald Reagan proclaimed, “Common sense told us that when you put a big tax on something, the people will produce less of it. So, we cut the people’s tax rates, and the people produced more than ever before.”

President Reagan knew then what we know now.  Republican pro-growth policies encourage robust economic growth and job creation, strengthening government revenues and helping to reduce the deficit.  In fact, since the tax relief was fully implemented in 2003, tax receipts have increased over 34.6 percent.  The economy has created more than 5.7 million jobs since August of 2003, with 128,000 being created last month alone.  The unemployment rate is 4.7 percent, which is lower than the average of the 1960s, 1970s, 1980s, and 1990s.  Over the past 12 months, employment increased in 48 states, and four states set record low unemployment rates.  Furthermore, the Gross Domestic Product grew at a swift 4.8 percent annual rate in the first quarter of this year, following brisk economic growth of 3.5 percent in 2005.

As our experience from these tax cuts has shown, freeing people of oppressive taxes provides a strong incentive to increase production and removes a strong disincentive to work.  Under Republican leadership, Congress has reduced income taxes for every American who pays income taxes.  Republicans have doubled the child tax credit, reduced the marriage penalty, cut taxes on capital gains and dividends, and created incentives for small businesses to purchase new equipment and hire new workers.  Altogether these tax relief policies have left $880 billion more with American workers and businesses than they had before the policies were adopted.  Republicans believe taxpayers know how to spend their money better than the government does.

Despite all of this progress, more work remains to secure our economic future.  We need to start with the permanent elimination of the death tax.  Today, the heirs of some family-owned farms and businesses stand to lose nearly half of all assets, including land, buildings, equipment, and capital.  Unfortunately, since many cannot afford to pass on their businesses under these conditions, they must sell out, leaving long-time employees jobless.  With circumstances such as this being commonplace today, family farms and small business owners throughout the country, as well as employees and the economy as a whole, suffer the consequences.  All of this is courtesy of the federal death tax.

Legislation passed in 2001 contained provisions to phase out the death tax by 2010, which is when the death tax will be completely eliminated.  However, this repeal is only temporary and will last for only one year.  In 2011, the death tax will be reinstated to its previous high level.  That is, unless the Senate acts.  I am a cosponsor of H.R. 8, which would permanently repeal the death tax.   Although this bill passed the House of Representatives in April 2005, Democratic obstructionism has left this important legislation facing a grim fate in the Senate.  I will fight against this partisan obstructionism this fall and urge the Senate to pass a permanent repeal of the death tax to protect our family farms and small businesses.

As we have recently seen, the future of the American economy is full of promise.  Through voting to bolster tax cuts and reduce wasteful spending, I will continue working to ensure our country can continue to fulfill this promise.  Working Americans demand and deserve no less.

Editor’s Note:  Virginia Foxx is a United States Representative from North Carolina’s Fifth Congressional District.  You may contact her office toll free at 1-866-677-8968 or e-mail her from her website, www.foxx.house.gov.

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