Suit & Tie

Washington, Jan 24 -

    This week Congressman Joe Knollenberg introduced H.R. 5126, the Family Security and Small Business Stimulus Act of 2008.  This bill cuts the 10% marginal income tax bracket to 5% for all taxpayers. The bill also triples the small business expensing limits for capital purchases.

    Knollenberg said, “Our economy needs a boost, and there is momentum to get something done in the form of a stimulus package.  I want to build support for something that’s easy to do and will have a positive short and long term effect.  Permanently cutting the 10% tax rate in half, to 5%, will help all taxpayers, including the lowest income taxpayers who need the help the most.  It will give their pocketbooks a shot in the arm now and allow them to keep more of their money in their own pockets year after year.”

Under the Family Security and Small Business Stimulus Act the current 10% tax bracket is cut in half to 5%, and made permanent.  This will result in a $400 tax cut for an individual or $800 tax cut for a family per year.  The relief is retroactive to the beginning of 2008.  Under Knollenberg's bill, taxpayers and families will receive an advance on their 2008 tax cut.  These checks will be mailed 30 days after the bill's enactment.

The Family Security and Small Business Stimulus Act also triples the Section 179 small business expensing limit from $125,000 to $375,000 per year for two years.  After that, expensing limits would return to $125,000 per year, adjusted annually for inflation.
    
“Increasing the amount a small business could expense encourages capital purchases.  When a small business knows it can expense a new purchase, it is more likely to make the investment.  Enabling small businesses to invest in new equipment and expand their operations will promote significant economic growth at a time when job-creation is crucial. 
    
“We can and should pass this stimulus package quickly because families and small businesses need it, and also because there are many more things we need to do.  We need to make the 2001 and 2003 tax cuts permanent, we need to bring down health care costs so all Americans can afford insurance, and we need to strengthen our educational system so our children and grandchildren have the skills they need,” Knollenberg continued.

Congress is currently considering several economic stimulus proposals.  Legislative action is expected in the next few weeks.  To read more about Knollenberg's legislation to address these issues, please go to www.knollenberg.house.gov