February 06, 2007


Senator notes rate reductions benefit taxpayers, stimulate economic growth

Washington, DC - Under legislation introduced by Idaho Senator Mike Crapo, middle-income taxpayers throughout the country will continue to reap the benefits of tax relief enacted in 2003. Crapo, a member of the Senate Finance Committee, with oversight on tax issues, said the measure would make permanent the tax relief approved earlier on capital gains and dividends. Crapo noted that the latest figures released from the Congressional Budget Office (CBO) show that reducing capital gains tax rates from 20% to 15% in 2003 has, to date, brought in a dramatic 68% increase in new revenues above expectations. Critics had claimed the U.S. Treasury would lose $5.4 billion as a result of the lower tax rates during that time frame; the actual revenue was an increase of $133 billion. "Middle-class Americans today are stockholders; nearly half of all taxpayers with incomes below $50,000 receive dividends or report capital gains," Crapo said. "The facts are in, and they show American families and workers, our national economy and our federal budget will benefit by making these tax reductions permanent. And when this tax relief is made permanent, middle-class taxpayers will be among the chief beneficiaries." Crapo noted that, under the original 2003 legislation, the capital gains rate for those in the lowest income brackets (10% and 15% brackets) will actually drop to 0% in 2008. The capital gains rate for all others will remain at 15% through 2010. His legislation will maintain the 15% tax rate and stop it from climbing back to 20%. "The increased revenues from these rate reductions are a critical point to factor in as we are consider our overall budget and spending plans for Fiscal Year 2008," Crapo added. "Although we were only able to enact a 2-year extension in the last Congress, now is the time to look at the record. This tax relief brought real economic growth. It has stimulated our economy and our markets and should be kept in place." # # #