Encouraging Innovation through the Research and Experimentation Tax Credit:
Another impediment to innovation and economic growth is the uncertainty surrounding whether the current Research and Experimentation tax credit will continue to exist. The tax credit was originally enacted in 1981 and currently provides companies with a 20 percent tax credit for incremental R&D expenditures. The credit encourages the technological developments that are an important component of economic growth. However, extensions of the tax credit have resulted in three gaps in coverage, two of which were retroactively filled. The on-again, off-again nature of the tax credit impedes long-term research in the U.S. Thus, President Bush will make the Research and Experimentation tax credit permanent. This should help spur the sustained, long-term investment in R&D that America needs to develop the next generation of critical technologies.
Ending the Death Tax:
The death tax also impedes economic growth because it levies yet another layer of taxes on capital. More capital investment means higher incomes for all workers. Since the marginal federal tax rate on savings can reach 68 percent (the 40 percent top income tax rate combined with the effect of the 55 percent top death tax rate and the state death tax credit), the death tax can also create a disincentive for seniors who want to save for their children or grandchildren.
The punitively high death tax can fall most heavily on small businesses and family farms that are asset rich but cash poor. According to a 1993 survey, nine of ten successors whose family businesses failed within three years of the owner's death listed the death tax as a contributing factor. Finally, by encouraging intricate planning techniques to reduce taxes, the death tax has created an entire industry of specialized lawyers and accountants. The added complexity and compliance costs make this one of the least efficient federal taxes.
President Bush believes that the bias of the death tax against the family farm and family business is the antithesis of the American Dream. Accordingly, his tax relief plan will eliminate the death tax. Eliminating the death tax will allow family farms and businesses to be passed from one generation to the next without having to break up or sell the assets to pay a punitive tax to the federal government. As a result, wealth would be taxed only when it is earned, not again when entrepreneurs and senior citizens pass the fruits of their labors to the next generation.
APPENDIX
Tax Rates by 2001 Taxable Income*
Current Code Bush Plan**
Single Single
$0 $27,050 15% $0 $6,000 10%
$27,050 $65,550 28% $6,000 $27,050 15%
$65,550 $136,750 31% $27,050 $136,750 25%
$136,750 $297,350 36% $136,750 -- 33%
$297,350 -- 39.6%
Head of Household Head of Household
$0 $36,250 15% $0 $10,000 10%
$36,250 $93,650 28% $10,000 $36,250 15%
$93,650 $151,650 31% $36,250 $151,650 25%
$151,650 $297,350 36% $151,650 -- 33%
$297,350 -- 39.6%
Married- Joint Filing Married- Joint Filing
$0 $45,200 15% $0 $12,000 10%
$45,200 $109,250 28% $12,000 $45,200 15%
$109,250 $166,500 31% $45,200 $166,500 25%
$166,500 $297,350 36% $166,500 -- 33%
$297,350 -- 39.6%
* Taxable income is income less deductions and personal exemptions.
**Rate schedule assumes tax plan is fully phased in.
Cutting Marginal Tax Rates to Raise the Standard of Living:
One of the most powerful tools the federal government has to raise standards of living is to lower marginal tax rates. The marginal tax rate is the tax on each additional dollar of income. The lower the marginal rate, the greater the incentive to find a better job, to save for the future, or start a new business. Lower marginal tax rates also leave more resources with innovative entrepreneurs, instead of funding government bureaucracies.
The marginal tax cuts of the 1980s helped generate the venture capital that is now fueling the growth of the Internet and other technologies. New technologies are boosting productivity and economic growth by helping companies achieve new efficiencies. In this environment, entrepreneurship has become the path to prosperity for many minorities, women, and young people. Yet, today's high marginal tax rates tend to penalize continued innovation and business formation and expansion.
High marginal tax rates inhibit entrepreneurial activity because they act as a success tax, claiming a larger share of income from flourishing enterprises, while the government shares little of the risk of loss. For most entrepreneurs, income taxes reduce their companies' cash flow — the money businesses need to expand, buy more equipment, and hire more workers.
To ensure continued innovation, President Bush believes the tax system should be revised to restore incentives for success. In this period of revolutionary technological change, the government should leave as many resources as possible with the entrepreneurs and companies that are generating new ideas, better jobs, and greater wealth. The President's tax relief plan will cut the top marginal rate, which many small businesses pay, from nearly 40 percent to 33 percent. Reducing the top rate will spur entrepreneurial activity and investment, helping to attract the best workers from around the globe to America.
When President Bush's proposal is fully in place, the typical family with two children will receive at least $1,600 in tax relief. This is real and practical help:
Sixteen hundred dollars will pay the average mortgage for almost two months;
Sixteen hundred dollars will pay for a year’s tuition at a community college;
Sixteen hundred dollars will pay the gasoline cost for two cars for a year; and
Sixteen hundred dollars will buy an average family 24 months worth of electric power.
Preserving Prosperity
"The momentum of today's prosperity began in the 1980s — with sound money, deregulation, the opening of global trade and a 25 percent tax cut. Along the way we have confirmed some truths and discarded some dogmas. Government can be an ally of enterprise — by creating an environment that rewards work and inspires investment. But government does not create wealth. Wealth is the economic measure of human creativity and enterprise." — President George W. Bush
In addition to making the tax code more fair, President Bush's agenda will also improve the performance of the economy. His tax cut will help prevent a prolonged economic downturn, and it will encourage innovation. His plan will also allow workers to pay down consumer debt, while leaving growing surpluses to pay down a record amount of public debt.
A Slowing Economy:
The evidence that the economy is slowing continues to build:
Consumer confidence has dropped for four straight months;
The manufacturing sector has contracted for six straight months;
Bankruptcies are on the rise;
The unemployment rate is beginning to climb; and
Economic growth slowed to a 1.4 percent annual rate at the end of 2000.
Every week we hear about another round of layoffs. Last month, Federal Reserve Chairman Alan Greenspan testified that the economy had almost stopped growing. President Bush believes that the best way to ensure that prosperity continues is to put more money in the hands of consumers and entrepreneurs. That is why he advocates cutting tax rates now. President Bush will work with the Congress to accelerate a portion of his tax plan to the beginning of 2001. An immediate tax cut would give the economy a timely second wind.
Lowering the Debt Burden on Working Americans:
Although the federal government is facing an enormous surplus, many Americans are not. Consumer debt has reached an all-time high and now exceeds $1.5 trillion (see Chart 3). Credit card debt alone totals over $600 billion, more than $2,000 for every man, woman, and child in the country. This high debt level will eventually restrict consumer spending. And if consumer spending slows, the economy will slow also. Tax relief would give these families the ability to pay down their debt.
Cuts the current 15 percent tax bracket to 10 percent for the first $6,000 of taxable income for singles, the first $10,000 for single parents, and the first $12,000 for married couples; and
Doubles the existing child tax credit to $1,000 and applying the credit to the AMT.
CHART 1
Lowering the High Tax Burden on Families:
Federal income tax revenue rose dramatically in the 1990s. Today, federal taxes from all sources are the highest they have ever been during peacetime, topping 20 percent of GDP. High taxes force families to work harder each year to fuel a growing government. Overall, Americans now work over four months of the year to fund government at all levels.
This high tax burden strips families of resources needed to help solve their most pressing problems. Every family faces different challenges: some need better childcare, some need tutoring for their children, and others need a greater variety of after-school programs. Government cannot tailor its programs to the needs of each family. That is why President Bush believes that the best way to help all families is to let each family keep more of its income — and spend it as it deems appropriate. His plan will lower the tax burden on families by, among other things, reducing tax rates, expanding the child credit, and reducing the marriage penalty. His plan will also raise the threshold for the phase-out of the child tax credit from $110,000 to $200,000 for married couples, and from $75,000 to $200,000 for single parents.
Reducing the Marriage Penalty
The current tax code frequently taxes couples more after they get married. This marriage tax contradicts our values and any reasonable sense of fairness. President Bush’s tax relief plan will greatly reduce the marriage penalty by restoring the deduction for two-earner families. This will allow the lower-earning spouse to deduct 10 percent - up to $3,000 - of the first $30,000 of income. The marriage penalty will be further mitigated by lowering marginal tax rates, which will reduce the portion of the marriage penalty that is derived from a steep rate structure.
Promoting Charitable Giving:
Since the introduction of the income tax, the law has recognized the importance of encouraging charitable giving by providing a deduction. Today, however, 70 percent of all filers cannot deduct their charitable donations because they do not itemize deductions. Thus, to encourage an outpouring of giving, President Bush's plan will expand the federal charitable deduction to non-itemizers. This change will allow every taxpayer to deduct his or her charitable donations and will generate billions of dollars annually in additional charitable contributions. The President also supports other proposals to increase charitable giving.
A Fair and Balanced Tax Cut:
President Bush believes that a fair tax cut does not pick winners and losers. Everyone who pays income taxes should receive a tax cut. He also believes that a tax cut should especially benefit lower and middle-income families. Accordingly, the lowest income families will receive the largest percentage reduction (see Chart 2). As a result, more affluent Americans will shoulder a larger portion of the federal income tax burden. The President looks forward to working with the Congress to address other fairness issues, such as the Alternative Minimum Tax, to further his goal of lowering income taxes for all Americans that pay them.
President Bush’s tax relief plan reflects this basic trust in the American people and confidence in the American ideal by increasing tax fairness and enhancing the performance of the economy. It includes:
Replacing the current tax rates of 15, 28, 31, 36, and 39.6 percent with a simplified rate structure of 10, 15, 25, and 33 percent (see Appendix for rate schedule);
Doubling the child tax credit to $1,000 per child and applying the credit to the Alternative Minimum Tax (AMT);
Reducing the marriage penalty by reinstating the 10 percent deduction for two-earner couples;
Eliminating the death tax;
Expanding the charitable deduction to non-itemizers; and Making the Research and Experimentation (R&D) tax credit permanent.
Increasing Tax Fairness
"My tax cut plan is not just about productivity, it is about people. Economics is more than narrow interests or organized envy. A tax plan must apply market principles to the public interest. And my plan sets out to make life better for average men, women and children." — President George W. Bush
The current tax code is full of inequities. Many single moms face higher marginal tax rates than the wealthy. Couples frequently face a higher tax burden after they marry. The majority of Americans cannot deduct their charitable donations. Family farms and businesses are sold to pay the death tax. And the owners of the most successful small businesses share nearly half of their income with the government. President Bush's tax cut will greatly reduce these inequities. It is a fair plan that is designed to provide tax relief to everyone who pays income taxes.
Increasing Access to the Middle Class:
High marginal tax rates act as a tollgate, limiting the access of low and moderate-income earners to the middle class. The belief that any worker, with enough effort, can join the middle class is at the heart of the American Dream. But when government attempts to help the poor by simply redistributing income, it often undermines incentives to work harder and earn more.
Because the benefit of the Earned Income Credit diminishes as a worker's income increases, a single mother with two children on the outskirts of poverty will lose nearly half of any additional dollar she earns (taking into account social insurance taxes, state income taxes, and federal income taxes). The benefit of taking an extra training course, working an extra shift, or assuming additional responsibility is cut in half by the government. As a result, a single mother with two children earning $25,000 a year faces a higher marginal tax rate than a lawyer earning $250,000.
Lowering these barriers to the middle class is one of President Bush's top priorities. To provide a greater reward for those who make the sacrifices needed to move ahead, the President's tax cut plan will substantially lower the marginal tax rate for low-income parents. The marginal federal income tax rate would fall by over 40 percent for low-income families with two children (see Chart 1), and by nearly 50 percent for families with one child. These lower rates result from two key changes in the tax code:
The United States has imposed economic sanctions on seven Sudanese individuals responsible for violence in Darfur and on more than 160 companies owned or controlled by the Government of Sudan. The United States took these steps to increase pressure on Khartoum to end the violence in Darfur. Furthermore, the United States has enforced the application of existing sanctions to deny Sudanese banks access to the U.S. financial system and use of the U.S. Dollar. The United States is pushing for full implementation of the Comprehensive Peace Agreement (CPA), which was signed in January 2005 and ended 21 years of civil war between the North and South. The CPA, which created the Government of National Unity, calls for democratic national elections before July 2009 and the deployment of troops away from the border. Implementation of the CPA will help end the crisis in Darfur and provide a framework for the development of a peaceful, unified, and democratic Sudan. The United States supports the rapid deployment of 26,000 United Nations-African Union Mission in Darfur (UNAMID) peacekeepers. Since 2004, the United States has spent more than $15 million to airlift 11,400 peacekeepers and their equipment to and from Darfur, and has provided over $30 million to train and equip those forces. Since 2004, total direct and indirect U.S. support provided to peacekeeping operations in Darfur totals more than $600 million.
U.S. assistance promotes democracy, human rights, and effective governing. President Bush launched the Millennium Challenge Cooperation (MCC) as a new model of assistance based on the principle that aid is most effective when it supports locally led and owned strategies for economic growth. The MCC is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people, so before a country can become eligible to receive assistance, MCC ensures that countries are committed to fighting corruption and protecting democratic principles of governance. To date, the MCC has signed eight compacts with African countries totaling $3.1 billion. The MCC also has "threshold" programs with seven African countries totaling $100 million and focused largely on fighting corruption and improving governance. Democracy and security work hand in hand. For example, the United States suspended assistance to Mauritania as a result of their military coup. We provided only support for assistance such as an independent election commission, press, and civil society, and Mauritania was then able to hold free and fair elections. The U.S. relationship with Mauritania is now stronger than ever, and they have become a key partner in the fight against terror in the Sahel. The United States promotes African security. Since 2005, the United States has trained over 39,000 African peacekeepers in 20 countries. The U.S. has trained over 80 percent of African peacekeepers who are currently deployed in African Union and United Nations missions both inside and outside of Africa. The U.S. is partnering with the A.U. and member states to support the establishment of an African Standby Force. The Washington Post cites an unfounded argument by Center for Strategic and International Studies Senior Associate Joel Barkan, claiming "money for once-robust programs aimed at strengthening democratic institutions such as courts and parliaments has dried up." (Stephanie McCrummen, "U.S. Policy In Africa Faulted On Priorities," The Washington Post, 2/22/08)
In FY 2008, the U.S. will provide nearly $172 million for programs that promote just and democratic governance in African nations. Continuing this funding, the President's FY 2009 request is nearly $273 million for such programs in Africa. The Washington Post also makes an unsupported assertion that "many Africans who hoped that the United States would support their struggle for more just and open societies have been disappointed," and "significantly in Kenya and Somalia, moderate Muslims felt unjustly targeted in the U.S.-driven hunt for terrorism suspects." (Stephanie McCrummen, "U.S. Policy In Africa Faulted On Priorities," The Washington Post, 2/22/08)
A recent survey shows that 87 percent of Kenyans hold a favorable opinion of the United States. A poll done by Pew Global in June 2007, shows residents of African countries hold the U.S. in high regard. The Washington Post makes an unwarranted claim that "in Sudan, analysts have suggested that U.S. reliance on Sudanese counterterrorism intelligence has prevented a tougher stance on the crisis in the country's western Darfur region, where a government crackdown on rebels has left as many as 450,000 people dead and 2.5 million displaced." (Stephanie McCrummen, "U.S. Policy In Africa Faulted On Priorities," The Washington Post, 2/22/08)
The United States Is Dedicated To Promoting Both Democracy And Human Rights While Also Assisting Refugees In Africa
According to the Heidelberg Institute of Conflict, when President Bush took office there were seven major wars taking place on the continent of Africa. Today, that number has been reduced to two. At least five African countries involved in war in the Congo in 2001 have ceased this involvement. When President Bush entered office, he urged Rwanda, Uganda, Zimbabwe, Nambia, and other African countries to exit the Congo. In 2006, Congo held its first free and fair election in more than 40 years. Most recently, the U.S. was heavily involved in the signing of the Goma agreement – the final step to disarm all remaining militias in eastern Congo and to ensure security and prosperity for the Congolese people. In the past four years alone, there have been more than 50 democratic elections in Africa, and more than two-thirds of Sub-Saharan African nations live in freedom. President Bush continues to support democratic transitions in many African countries such as Liberia and Mauritania, strengthening democratic institutions in post-conflict countries, such as the Congo, Liberia, and Burundi and assisting civil society organizations across Africa in combating gender-based violence, trafficking in persons, and other human rights violations. The U.S. is the largest donor to the Office of the United Nations High Commissioner for Refugees (UNHCR), with more than 40 percent of that funding going to Africa in 2007. The Washington Post inaccurately asserts that President Bush's "focus on counterterrorism has overtaken his other stated foreign policy goals of promoting democracy and human rights." (Stephanie McCrummen, "U.S. Policy In Africa Faulted On Priorities," The Washington Post, 2/22/08)
The Senate Intelligence Committee carefully studied this issue and found that without the limited retroactive liability protection discussed above, "the private sector might be unwilling to cooperate with lawful government requests." The Committee rightly determined that this lack of protection could result in a "possible reduction in intelligence" that is "unacceptable for the safety of our Nation."
The proposed liability protection is based on the Intelligence Committee's conclusion that companies acted in good faith with written assurances from the government and in the aftermath of the worst foreign attack on U.S. soil in history. It would not prevent lawsuits against the government and would not provide immunity from criminal prosecution.
Companies should not be held responsible for verifying the government's determination that requested assistance was necessary and lawful – and such an impossible requirement would hurt our ability to keep the Nation safe. Requiring companies to second-guess the government's determinations would slow or eliminate critical intelligence collection and would place private parties in the impossible position of making legal determinations without access to the classified facts necessary to make such determinations.
Companies alleged to have assisted the government in the aftermath of September 11th should not face massive and costly litigation for helping protect our country. Such litigation also risks the disclosure of highly classified information.
Failing to provide such protection sends an unfortunate message to every private party that may in the future consider whether to help the Nation.
"The Protect America Act expires in just 10 days, yet after nearly six months of delay, Congress has still not taken the necessary action to keep our Nation safe. The terrorist threat we face does not expire on February 1. For the sake of our national security, Congress must act now to send the President a bill that keeps a critical intelligence gap permanently closed and provides meaningful liability protection for companies that may have assisted in efforts to defend America following the 9/11 attacks."
- White House Press Secretary Dana Perino, 1/22/08
Congress has just 10 days to permanently close a critical intelligence gap that was making our Nation less safe. Last August, Congress passed the Protect America Act (PAA), which provided our Intelligence Community a critical tool it needs to acquire important information about terrorists who want to harm America. The PAA will expire in just 10 days. Congress must act now to keep our Nation safe by making the critical authority to collect intelligence under the PAA permanent and by providing meaningful liability protection to companies alleged in lawsuits to have assisted in the efforts to defend our Nation following the 9/11 attacks.
The terrorist threat does not expire February 1, and neither should legislation critical to keeping our Nation safe. The Senate Intelligence Committee has approved a bipartisan bill that, while not perfect, is a significant step in the right direction. Congress should continue its work on this bill and send the President legislation as soon as possible that he can sign. The Senate Intelligence Committee Bill Represents A Bipartisan Solution That Would Protect Americans And Their Liberties
The Senate Intelligence Committee bill was crafted in a careful, bipartisan manner to protect our country against terrorists and other foreign threats while preserving the privacy of Americans. This bill would:
Put in place extensive privacy safeguards. For example, it appropriately retains a requirement to seek court orders to conduct surveillance of persons in the U.S. It also requires court review of the procedures used to protect information about Americans.
Make America safer by extending the authority we need to keep critical intelligence gaps closed. Outdated provisions in Foreign Intelligence Surveillance Act (FISA) often required us to obtain court orders before intercepting the communications of terrorists overseas. This bill would correct that problem.
Provide liability protection to companies alleged to have assisted the Nation with intelligence activities after the September 11 attacks. This protection would only be extended if the companies were told the activity was authorized by the President and determined to be lawful.
The Administration has some concerns with the Senate Intelligence Committee bill, but it represents the best chance for a timely and bipartisan solution to help keep our Nation safe. For example, the Administration opposes particular technical aspects of the so-called "Wyden Amendment," which would impose undue operational burdens on the Intelligence Community’s collection of foreign intelligence information on U.S. persons. We look forward to working with Congress to address these concerns.
Liability Protection Is Critical To The Ongoing Effort To Protect The Nation From Another Catastrophic Attack
George Walker Bush (IPA: /???? 'w??k?? b??/) (born July 6, 1946) is the forty-third and current President of the United States of America. He previously served as the forty-sixth Governor of Texas from 1995 to 2000 and is the eldest son of former United States President George Herbert Walker Bush. He was inaugurated as President on January 20, 2001 and his current term is scheduled to end on January 20, 2009.
After graduating from college, Bush worked in his family's oil businesses. In 1978, he made an unsuccessful run for the U.S. House of Representatives. He later co-owned the Texas Rangers baseball team before returning to politics in a campaign for Governor of Texas. He defeated Ann Richards and was elected Governor of Texas in 1994. Bush was elected to the Presidency in 2000 as the Republican candidate in a close and controversial contest, in which he lost the nationwide popular vote, but won the electoral vote.
As president, Bush signed into law a $1.35 trillion tax cut program in 2001, and in 2002 the No Child Left Behind Act. In October 2001, after the attacks on September 11, 2001, Bush announced a global War on Terrorism and ordered an invasion of Afghanistan to overthrow the Taliban, destroy Al-Qaeda, and to capture Osama bin Laden. In March 2003, Bush ordered the invasion of Iraq, asserting that Iraq was in possession of weapons of mass destruction and that the war was necessary for the protection of the United States.
Running in the midst of the Iraq War, Bush was re-elected on November 2, 2004; his presidential campaign against Senator John Kerry was successful despite controversy over Bush's execution of the Iraq War and domestic issues. After his re-election, Bush received increasingly heated criticism. He has the distinction of having both the highest and the lowest approval ratings of any president in history during his term. His domestic approval rating has ranged from 90 percent (the highest ever recorded by The Gallup Organization) immediately after the September 11, 2001 attacks to a present low of 19 percent, the highest level of recorded disfavor for any sitting president in American history.
President Bush seems to be under pressure from that stuff he has been spreading for sometime now...
Maybe a little compaction in Congress will be enough pressure for them to take a break and let the Laws and Taxes doled out to the citizens of the country a break as well.
In preperation A they almost had a winner... but enevitabley it failed
So then came Preperations B through G which most where either voted out or nothing more than Pilot programs.
Then Preperation H was tried, And Congress found that when preperation H was applied it worked pretty good on the whole.
So in agreement congress passed this preperation around and also into the senate.
And now it seems as if the politician are comforted by the use of Preperation H and will continue to pass it around on the whole.
EricKissesDeeply Forum Posts (1,146)
ha ha ha ha ha
RE: Thread killers gathering place
Now put that in your Canadian Bacon Pipe and Smoke itI did your request