Pending in Washington is a tax relief bill that will extend a variety of tax cuts enjoying broad, bipartisan support – tax relief that clearly has kept our economy rolling, even in the face of terrorist attacks, global economic pressures and the subsequent War on Terror.
Back in November, these provisions passed the Senate by an overwhelming 64 to 33 vote. That clearly shows that there is a large cadre of support for extending tax relief for working Americans.
Few dispute the benefits of allowing people and businesses to keep more money in their pocketbooks and out of the hands of Washington bureaucrats. Time and time again, tax relief has been used not only to keep the economy healthy, but to bolster the federal budget. John F. Kennedy did it. So did Ronald Reagan. Now President George W. Bush is again using this proven economic stimulus at a critical time.
Most Americans understand that when people are allowed to keep more of their money, that money in turn is reinvested in the economy. Job creation ensues, standards of living are increased and more people come on the tax rolls, providing more income for the federal treasury. It’s a win for both the public and private sectors.
As America faces serious challenges in the world economy and from new terrorists’ threats specifically targeting our economy, it’s even more imperative that we keep the tax relief provisions in place. To do otherwise would amount to a tax increase for just about every American with a job, and a lot of Americans would lose jobs. Neither is an attractive prospect as our region recovers from Hurricane Katrina.
The centerpiece of the current tax relief bill is a $30 billion provision shielding nine million Americans from the Alternative Minimum Tax (AMT). Far from wealthy, these are middle income folks scattered throughout the 50 states.
Though the AMT was conceived to prevent wealthy people from avoiding many taxes, it has come to affect more and more middle class and even low income people. That’s because certain AMT qualifiers include now commonplace items like mortgages – not hard to find when you consider that 70 percent of Americans now own their own homes. We must correct problems with this tax and shield more Americans from it.
For businesses, this initiative seeks to extend a tax credit for research and development and preserves new tax deductions for small businesses and welfare-to-work tax credits. For education, this bill continues deductions for teacher classroom expenses.
One thing can’t be overstated. The tax relief implemented during this Administration has kept America going, even in the face of terrorist attacks, threats, economic competition and natural disasters not seen in our lifetimes.
The fact that right now we have a scant 4.9 percent unemployment rate nationwide, that inflation remains in check and that revenue to the federal grew by 14 percent last year are all clear indicators that tax relief works. It gives workers a fatter pocketbook, keeps our economy strong and gives the federal government more resources.
As Mississippi and the Gulf region recover from Hurricane Katrina, our local economy can benefit greatly from these tax relief provisions, and our rebuilding will be accelerated. I want Mississippians to enjoy the same low 4.9 percent unemployment rate that we’re seeing nationwide. I want Mississippians at Katrina’s point of impact to once again live in permanent homes and have a strong and steady income. The best way for us to get there – and for all of America to remain economically strong – is to continue these tax relief policies. Tax relief works for working Americans. It has always worked before, and it always will.
Senator Lott welcomes any questions or comments about this column.
Write to: U.S. Senator Trent Lott, 487 Russell Senate Office Building, Washington, D.C. 20510 (Attn: Press Office) or Email: email@example.com