Research Briefing

On This Tax Day, A Look At GOP Tax Solutions That Help Families, Create Jobs, Provide Health Care & Produce Energy

GOP BUDGET CUTS TAXES FOR AMERICAN FAMILIES AND JOB CREATORS

Republican Alternative Budget Would Save Families Up To $3,400 A Year In Taxes. “House Republicans propose reducing the lowest individual tax rates from 15 percent to 10 percent and from 10 percent to five percent. Under the proposal, a married couple filing jointly could save up to $3,400 a year in taxes. The alternative also ensures that no additional middle class taxpayers will fall victim to the Alternative Minimum Tax.” (Rep. John Boehner, “Better Solutions: A Compilation Of GOP Alternatives,” House Republican Conference, 1/29/10)

• Alternative Budget Would Simplify Tax Code, Make 2001 And 2003 Tax Cuts On Income, Capital Gains And Dividends Permanent. “Our budget does not raise taxes, and makes permanent the 2001 and 2003 tax laws. In fact, we cut taxes and reform the tax system. Individuals can choose to pay their federal taxes under the existing code, or move to a highly simplified system that fits on a post card, with few deductions and two rates. Specifically, couples pay 10% on their first $100,000 in income (singles on $50,000) and 25% above that. Capital gains and dividends are taxed at 15%, and the death tax is repealed.” (Rep. Paul Ryan, “The GOP’s Alternative Budget,” The Wall Street Journal, 4/1/09)
• But House Dems Rejected Republican Proposal, Instead Passing Record-Breaking $3.55 Trillion Budget. “The House of Representatives passed a $3.55 trillion budget for fiscal year 2010 Thursday night, capping off weeks of acrimonious partisan debate and a long day of voting marked by the defeat of several alternative plans … All but 20 House Democrats supported it; no House Republican voted in favor. … The House rejected an alternative proposal put forward by the GOP leadership, which called for $4.8 trillion less in overall spending over the next decade ...” (Dana Bash and Deidre Walsh, “U.S. House Passes $3.55 Trillion Budget For Fiscal Year 2010,” CNNPolitics.com, 4/2/09)

Republican Budget Would Cut Tax Rate On Job Creators, Presently One Of The Highest In The Industrialized World. “[T]he budget permanently cuts the uncompetitive corporate income tax rate -- currently the second highest in the industrialized world -- to 25%. This puts American companies in a better position to lead in the global economy, promotes jobs here at home, and strengthens worker paychecks.” (Rep. Paul Ryan, “The GOP’s Alternative Budget,” The Wall Street Journal, 4/1/09)

• Because While Other Industrialized Nations Have Been Slashing Their Corporate Tax Rate, America Has Left Its Tax Rate Unchanged, Making Us Uncompetitive. “The U.S. has left the major features of its business tax system unchanged over the past fifteen years. Meanwhile, other countries have been changing theirs, potentially hurting the competitiveness of the United States. Perhaps most emblematic of the trend abroad is lower corporate tax rates in virtually all developed nations. As a result, the United States now has the second-highest statutory tax rate among OECD member nations.” (Robert Carroll, “Comparing International Corporate Tax Rates,” Tax Foundation, 8/28/08)

GOP HEALTH CARE PLAN USES TAX CREDITS TO HELP PAY FOR COVERAGE, LOWER PREMIUMS

Legislation From Sen. Tom Coburn (R-OK) And Rep. Paul Ryan (R-WI) Creates Tax Credits To Help Pay For Coverage. “[The Patients’ Choice Act] would shift health care tax benefits to individuals and families in the form of a ‘Medi-Choice’ tax rebate worth about $2,200 for individuals and $5,700 for families. Under our plan, if you like the health care you have, you can keep it - but you’ll have more money in your pocket because you will still receive a tax rebate.” (Sen. Tom Coburn (R-OK), Rep. Paul Ryan (R-WI) and Rep. Devin Nunes (R-CA), “An Alternative To Obamacare,” Real Clear Politics, 5/20/09)

House GOP Health Care Plan “Had No Tax Increases” But Was Rejected. “The House rejected an alternative Republican health care plan in a nearly party-line 258-176 vote. The Republican proposal had no tax increases and would have lowered insurance premiums by creating high-risk insurance pools, allowing workers to buy health insurance across state lines and rewriting medical malpractice law.” (Jennifer Haberkorn & S.A. Miller, “House Oks Health Reform Bill,” The Washington Times, 11/8/09)

• Even Though CBO Confirmed House Republican Alternative Would Have Lowered Premiums For Americans By Up To 10 Percent. “CBO estimates that the combination of provisions included in the amendment would reduce average private health insurance premiums per enrollee in the United States relative to what they would be under current law. The average reductions would be larger in the markets for small group and individually purchased policies, which are the focus of many of the legislation’s provisions. In the small group market, which represents about 15 percent of total private premiums, the amendment would lower average insurance premiums in 2016 by an estimated 7 percent to 10 percent compared with amounts under current law.” (Douglas W. Elmendorf, Congressional Budget Office, Letter To Honorable John A. Boehner, 11/4/09)

Republicans Also Want Expansion Of Tax-Free Health Savings Accounts. “House Republicans sent a letter to President Barack Obama today [to] … tout various members’ proposals that would: Give small businesses a tax deduction equal to 20% of their income; Let small businesses band together in associations to buy health insurance more cheaply; Curb civil lawsuits; Lower individual income tax rates; Expand health savings accounts, which are being squeezed in some of the current health-care reform proposals; Increase businesses’ ability to recover current losses by re-filing prior tax returns.”  (John D. McKinnon, “House Republicans Press Obama On Jobs Creation,” The Wall Street Journal’s “Washington Wire” Blog, 10/9/09)

AND GOP ENERGY PLAN FOCUSES ON TAX INCENTIVES TO PRODUCE MORE, CONSERVE MORE

GOP Has An “All Of The Above” Energy Plan That Includes Tax Incentives For Energy Efficiency And Development Of Alternative Energy Production. “House Republicans today revived their ‘all of the above’ pitch on energy policy, putting out an energy plan built around increased development of nuclear, fossil fuels and alternative energy… On the conservation and efficiency front, the legislation provides tax incentives for alternative fuel vehicles, prizes for development of innovative energy technologies, and a series of business and residential tax incentives for energy efficiency. Additionally, the proposal lays out steps to speed up licensing for nuclear power plants, setting a target of building 100 new nuclear power plants over the next 20 years.” (Alex Kaplun, “House GOP Brings Back 'All Of The Above' As Response To Dems' Energy Agenda,” E&E, 6/10/09)

And Would Expand Energy Production From More Oil And Natural Gas To Nuclear Power. “House Republicans are calling for 100 new nuclear power plants to be built in the next two decades as part of an energy plan they say is a better alternative than one championed by Democrats. The legislation unveiled by the GOP yesterday would also increase production of oil and gas offshore, open the Arctic National Wildlife Refuge to drilling, and spur refinery construction. The money from the new drilling would go into a trust fund that would pay for the development of renewable energy.” (“GOP Proposes 100 New Nuclear Plants,” The Associated Press, 6/11/09)