Ways and Means Committee hears testimony to cut the capital gains tax and move to full business expensing.
WASHINGTON – Yesterday, Reps. David Dreier (R-Calif) and Fred Upton (R-Mich) testified to the House Ways and Means Committee in support of two tax measures to be added to President Bush\’s tax relief proposal put forward in January. Americans for Tax Reform (ATR), the nation\’s leading taxpayer advocacy organization, voiced strong support for the proposals, which would boost growth and investment now and over the next generation.
Rep. Dreier, who is co-chairman of the bipartisan, bicameral Zero Capital Gains Tax Caucus, testified in support of his legislation, the "Investment Tax Incentive Act," which reduces the capital gains tax on new investment. The legislation provides an incentive for new money to enter financial markets as investors take advantage of the lower rates. And the new capital funded by increased investment will create jobs and income growth for American workers.
Rep. Upton testified in support of allowing businesses to expense investments immediately. Currently, the cost of new investment must be paid up front, but can only be written off over a period of many years. This policy increases the cost of capital and stifles capital investment. Rep. Upton\’s testified in support of a proposal that will allow businesses to expense investment in the year the purchase was made, providing incentives for small and capital-intensive industries to upgrade their equipment. More investment leads to greater employment, higher incomes, lower prices, and a better standard of living for all working American families.
"The economic slowdown was caused by a sharp reduction in capital investment," said Grover Norquist, who heads ATR in Washington. "The proposals put forward today will immediately target capital investment, which is the most effective way to boost business expansion, create jobs, and bring individual investors back into the markets," he continued.
Both measures should garner broad support. The Zero Capital Gains Tax Caucus, co-chaired by Rep. Dreier, consists of over 100 members of Congress. Additionally, business expensing legislation in the House of Representatives has nearly 100 co-sponsors between separate bills sponsored by Reps. Jerry Weller (R-Ill) and Phil English (R-Pa).