Wednesday, January 15, 2003
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Wednesday, January 15, 2003 |
Collins introduces job creation/tax reform packageFour bills aim to help American workers compete in global market
WASHINGTON - On the first legislative day of the 108th Congress, U.S. Rep. Mac Collins introduced four bills aimed at making American workers competitive in the global market. The Collins Tax Reform and Worker Assistance package will reform current tax policies which hamper American business and American workers in competition with foreign companies. These tax provisions are a leading source of lost jobs in the American economy. "The largest challenge faced by the American worker is the current tax system in this country," said Collins. "Our tax policies place American businesses, which provide jobs for American workers, at a severe disadvantage to foreign competitors. The tax structure must be changed in ways that reward rather than punish manufacturers who remain in this country and provide U.S. jobs and that can't happen too soon. "There is an American worker on an assembly line, making a product that they hope to sell to a customer in the U.S. or overseas," he continued. "On an identical assembly line in another country, there is a foreign worker making a similar product to sell to the same customer. Because of our tax codes, the American worker is at a disadvantage. All of the taxes required by U.S. tax regulations are added to the price of the product and because foreign nations do not have similar tax provisions, they can sell their products for less than American businesses holding back the potential growth our economy needs to obtain more of the world's business and create more jobs. It's all about jobs." The bills introduced today address four provisions of U.S. tax law; repeal of the Alternative Minimum Tax on corporations and individuals, elimination of the double taxation on stock dividends, reduction of the capital gains tax rates, and calls for more realistic depreciation schedules for capital expensing. The corporate Alternative Minimum Tax (AMT) is an alternative tax structure put in place in the 1980s which forces businesses to keep two sets of ledgers for tax purposes. They must first calculate their tax bill under the standard corporate tax rules, and then they must again calculate their tax bill under a completely different set of rules established under the AMT. The separated structure adds enormous accounting costs. The AMT usually requires businesses to pay a higher rate of tax when they can least afford it during economic downturn periods. Even businesses not subject to the AMT must go through the computations to determine whether or not they are liable for the tax. he legislation introduced last week will repeal the AMT and allow businesses to use the AMT credits they have accrued over a five year period. AMT repeal is one of the major initiatives sought by the U.S Chambers of Commerce to help spur investment and job creation. "The AMT is a disincentive to invest that has long outlived its purpose," said Collins. The current Capital Gains Tax Rate in America is the highest of any industrialized nation and creates a significant disincentive for investment. This in turn causes a general economic sluggishness and prohibits business growth, which is a major source of job creation. The recent legislation would reduce the exorbitant rate and make it more in line with rates of taxation in other nations with whom American workers compete. The U.S. tax code is also one of the few that double taxes the dividends on investment, both at the corporate level and the individaual level. This legislation will eliminate double taxation of dividends, which is an unfair burden on taxpayers. Depreciation tax laws provide businesses the ability to deduct the costs of capital investments over time. Current depreciation schedules are dramatically out of line with the real economic life and use of the properties that are being purchased in today's markets. Often the number of years allowed for the deduction exceeds the number of years the investor may finance the capital investment. The result is a higher tax cost. This legislation will require the Secretary of the Treasury to further study depreciation schedules and provide specific reform recommendations, which will bring them more in line with the real economic life of assets. "These changes and other reforms will make the American worker more competitive in the world market. By leveling this playing field we will keep more American jobs in the United," Collins said.
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