spursncowboys
04-05-2010, 10:40 AM
Step Two: Reduce Marginal Tax Rates for Individuals and Businesses
Reduce the top tax rates on individuals, small businesses, and corporations by 10 percentage points through 2013, and reduce the individual income tax rates to three levels: 10, 15, and 25 percent. In addition, as part of this second step:
The Alternative Minimum Tax should be repealed; and
The death tax rate reduced to 15 percent with a $5 million individual exclusion.
President Obama and Congress may want to consider additional tax elements to build on this foundation, such as expanding bonus depreciation for small businesses, but these additional elements cannot match rate reductions as sound and effective tax policy.
According to analysis performed at the Center for Data Analysis at The Heritage Foundation using the widely respected Global Insight U.S. Macroeconomic Model,[3] these policy changes would strengthen the economy significantly this year. Compared to the economy's trajectory absent a stimulus policy, adopting the Heritage tax proposal would mean that 493,000 more Americans have jobs by the end of 2009, and, by the end of 2010, employment would increase by 1.3 million jobs. Over this same two-year period, these tax policy changes would add an additional $187 billion in GDP and increase the economy's otherwise sluggish growth rate by six-tenths of a percentage point.
This two-step tax policy would reduce tax receipts relative to current policy by about $640 billion over three years. This figure results from the fact that new growth in jobs and output would expand the tax base for personal income taxes by an average of $204 billion and corporate income taxes by an average of $51 billion per year over this critical three-year period, thereby significantly reducing the net tax loss to the Treasury.
Economic recovery does not come from Washington, but Washington can help. Economic recovery is achieved by the economy itself, and Washington's effective help moves that process along at a swifter pace. By far the most effective means of helping the economy recover is to improve the incentives that drive economic activity, and that means reducing tax rates on work, saving, investment, risk taking, and entrepreneurial activity.
http://www.heritage.org/Research/Reports/2009/01/Economic-Recovery-How-Best-to-End-the-Recession
Reduce the top tax rates on individuals, small businesses, and corporations by 10 percentage points through 2013, and reduce the individual income tax rates to three levels: 10, 15, and 25 percent. In addition, as part of this second step:
The Alternative Minimum Tax should be repealed; and
The death tax rate reduced to 15 percent with a $5 million individual exclusion.
President Obama and Congress may want to consider additional tax elements to build on this foundation, such as expanding bonus depreciation for small businesses, but these additional elements cannot match rate reductions as sound and effective tax policy.
According to analysis performed at the Center for Data Analysis at The Heritage Foundation using the widely respected Global Insight U.S. Macroeconomic Model,[3] these policy changes would strengthen the economy significantly this year. Compared to the economy's trajectory absent a stimulus policy, adopting the Heritage tax proposal would mean that 493,000 more Americans have jobs by the end of 2009, and, by the end of 2010, employment would increase by 1.3 million jobs. Over this same two-year period, these tax policy changes would add an additional $187 billion in GDP and increase the economy's otherwise sluggish growth rate by six-tenths of a percentage point.
This two-step tax policy would reduce tax receipts relative to current policy by about $640 billion over three years. This figure results from the fact that new growth in jobs and output would expand the tax base for personal income taxes by an average of $204 billion and corporate income taxes by an average of $51 billion per year over this critical three-year period, thereby significantly reducing the net tax loss to the Treasury.
Economic recovery does not come from Washington, but Washington can help. Economic recovery is achieved by the economy itself, and Washington's effective help moves that process along at a swifter pace. By far the most effective means of helping the economy recover is to improve the incentives that drive economic activity, and that means reducing tax rates on work, saving, investment, risk taking, and entrepreneurial activity.
http://www.heritage.org/Research/Reports/2009/01/Economic-Recovery-How-Best-to-End-the-Recession