Crapo: Reductions in Taxes and Spending Are Key to Bipartisan Agreement on Deficit
Historic opportunity now to cut taxes on individuals and business
Washington, D.C. - A bipartisan agreement announced this week by six U.S. Senators to cut the nation's deficit by about $4 trillion over ten years also provides a historic opportunity to reform the tax code to make it fairer and flatter, according to Idaho Senator Mike Crapo. Crapo is a member of the Senate bipartisan group, dubbed the "Gang of Six" that has worked for months on a bipartisan agreement on spending reductions and tax reform that could win wide support in Congress. He is also a co-sponsor of the Cut, Cap and Balance legislation that was voted down today in the Senate.
Crapo, a member of the Senate Finance and Budget Committees, joined fellow Senators Saxby Chambliss (R-Georgia), Tom Coburn (R-Oklahoma), Kent Conrad (D-North Dakota), Dick Durbin (D-Illinois) and Mark Warner (D-Virginia) to bring the recommendations before the Senate. Crapo, Coburn, Conrad and Durbin all served on the National Commission on Fiscal Responsibility and Reform as well.
"We've got to get our economy back on a strong, dynamic track and the way to do that is through cutting spending, lowering taxes and encouraging investment in the economy," Crapo said. "If you look at our tax code today, you would have a hard time finding one that is more unfair, more complex, more expensive to comply with and frankly, more anti-competitive to U.S. business interests. We need to work with the private sector to create jobs and tax reform that can have that type of dynamic effect on our economy. We must reduce tax rates and let the economy produce jobs and create new revenue that will reduce our federal deficit."
The "Gang of Six" plan would provide for the following:
- Lowers the top income rate to as low as 23 percent, the lowest in nearly 100 years (1916).
- Three income tax rate brackets would be as low as 8 percent, 14 percent and 23 percent.
- The Alternative Minimum Tax (AMT), encroaching on the middle class, is eliminated.
- Corporate tax rate reduced from 35 percent to as low as 23 percent, ending the U.S. reign as the world's second highest business tax and making American business more competitive on the world market.
- Moves to more of a "flat" tax by ending many tax loopholes, retaining popular benefits like the home mortgage deduction.
- Establishes spending caps and directs agencies and Congressional committees to reduce spending.
- Ties some benefit increases to the cost of inflation while maintaining safety net programs.
- Immediately cuts deficits by $500 billion.
Crapo is also a co-sponsor of the Cut, Cap and Balance legislation that was voted down today in the Senate. He said the proposal should be brought up again before Congress as soon as possible and pursued until it passes both the U.S. House and the Senate.