Heritage Looks at Jim Jordan’s Economic Freedom Act
Posted by Brian Garst on August 19, 2010
This Heritage Foundation report looks at the Economic Freedom Act, proposed legislation by Jim Jordan, which includes a permanent repeal of the capital gains tax and the death tax, two goals of the Double Taxation Working Group:
The Economic Freedom Act (H.R. 5029), introduced by Representative Jim Jordan (R–OH), would terminate the Troubled Assets Relief Program (TARP) and repeal the remaining stimulus spending, reducing a number of taxes as economic stimulus instead. These tax reductions would include: permanent repeal of the individual and corporate capital gains tax; reduction of payroll taxes for employers and employees by half for 2010; repeal of the estate tax; and a reduction of the top corporate tax rate from 35 percent to 12.5 percent.
A static and dynamic analysis of the Economic Freedom Act performed by analysts in the Heritage Foundation’s Center for Data Analysis shows that the relief and stimulus would be significant, and the dynamic economic effects would offset much of the cost of the reduction in tax rates over the longer term. Over the 10-year window (2011–2020), however, the act would increase the deficit because the act’s reduction in spending (such as the repeal of TARP) does not offset the cost of the reduction in tax rates. However, Congressman Jordan also supports the FY 2011 Republican Study Committee (RSC) budget plan, which proposes spending cuts designed to eliminate the deficit in 10 years. Coupled with such a plan, the Economic Freedom Act would be much more affordable.
The DTWG does not endorse specific legislation, but encourages all lawmakers to look for responsible ways to eliminate instances of double taxation.
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