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Tax relief is a vital part of the President's agenda. He believes that countries with low taxes, limited regulation, and open trade grow faster, create more jobs, and enjoy higher standards of living than countries with bigger, more centralized governments and higher taxes. President Bush also understands that, over the long run, hard working, risk-taking individuals, not government programs, create wealth. I believe it is because of this policy, that our economy is currently making a strong rebound.
After the devastation of 9/11 our economy hit a low point, but sound economic policies supported by the President and enacted by Congress have helped pull the economy out of the slump. The tax relief plans of 2001 and 2003 have helped spur economic growth and have helped create over 1.9 million jobs in the last year. Recent good news from the Commerce Department shows an economy that is strong and getting stronger. The Commerce Department announced at the end of September that the U.S. gross domestic product grew at a seasonally adjusted annual rate of 3.3 percent during the 2nd quarter, up from a previous estimate of 2.8 percent growth. Also, this month the Department of Treasury and the Office of Management and Budget released the final tabulations for the fiscal year 2004 budget. It shows the deficit at $413 billion - down $108 billion from the administration’s February projections. The reduction is primarily credited to higher than expected revenues and strong economic growth.
Recently the President signed into law legislation that is more good news for many American families, workers and small businesses. H.R. 1308 will extend certain parts of his tax relief plan that would otherwise expire next year, ensuring that over 94 million Americans will not pay higher taxes next year. This legislation will provide tax relief by extending marriage penalty relief, the expansion of the 10-percent income tax bracket and the $1,000 child tax credit until 2008. The higher 15-percent refundability rate will be accelerated to the beginning of 2004. The extension of these tax credits will save families $109 billion in tax increases over the next 10 years. The conference report also extends relief from the Alternative Minimum Tax through 2005 - without this provision more middle-income families will be pushed into the AMT. It also provides assistance to military families in combat zones and simplifies the tax code by creating a uniform definition of a child for tax purposes.
Last week Congress passed another important tax piece that will help create jobs in the United States. The American Jobs Creation Act (H.R. 4520) will enhance the competitiveness of U.S.-based companies, particularly those engaged in exporting and manufacturing. This legislation is vital to continued economic growth in Oklahoma and across the United States. H.R. 4520 ends sanctions against American goods and services by repealing the Foreign Sales Corporation - Extra Territorial Income (FSC-ETI) tax. This legislation will reduce the unfair practice of double-taxing US companies doing business overseas, encouraging companies to reinvest earnings in the United States. It will encourages companies to reinvest foreign earnings in the United States by temporarily taxing repatriated income at 5.25 percent.
These two pieces of legislation will help grow the economy by offering further tax relief for Americans and American companies. This is tremendous progress in creating a fairer and simpler tax structure. We will continue to look at the tax policy in the next session of Congress in order to make key pro-growth reforms.
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