I have no doubt that Iowans are still deeply concerned about the current state of our nation. My concerns are shared with them during times like these, when many have lost hope, jobs are waning and families are hurting. I stand with my fellow citizens who are responding with outcries of ‘No More!’
I must respond to the post by Congressman Dave Loebsack, from March 9, 2009, in the Gather.com. Congressman Loebsack’s message is out of touch with reality and easily misinterpreted by those who don’t understand the issues or background.
According to Loebsack the American Recovery and Reinvestment Act was designed to provide relief. In reality, it was designed to expand government and your dependence upon it. It is a leftist agenda that reduces civil liberties while introducing new layers of controls that permeates every area of our way of life.
Congressman Loebsack, we know you believe the recession began in 2007, but tell your constituents why. It was because of you and the Democrat controlled Congress that refused to do the right thing in regard to Freddie Mac and Fannie Mae, and instead forced banks to loan money to people for homes they could not afford. Now they want us all to believe that it was the fault of the Republicans and that we should all pay for it.
This financial crisis has left millions of Americans struggling. Yet what Congressman Loebsack doesn’t seem to grasp is that the problems many have are “fixed monthly expenses”. So no matter how much money you throw at them, the struggles will remain after the money is gone.
The estimate that 37,000 jobs will be saved or created in Iowa with 7,000 in the second district was disingenuous. But we are still missing the information about whom, where and how Loebsack came up with these numbers. Second, Loebsack has never shared information about what kind of jobs will be saved and/or created? Third, what industries will do the hiring and how long will it take? Unfortunately, these empty promises by Loebsack are headline grabbers because we all want it to happen so badly we tend to believe it’s the truth. The fact remains that if Loebsack is going to promise that kind of employment they should have more then mere totals to offer the people.
Loebsack said that “The American Recovery and Reinvestment Act HR 1 contains $550 billion dollars in investment and $282 billion in tax cuts. This statement demonstrates that he didn’t read the bill! Loebsack and the Democrats lead by Nancy Pelosi rammed more than 1,000 pages of spending through the House of Representatives in twelve hours. Loebsack would have had to read more than 600 words per minute non stop during that time frame, without a break, to read the bill.
The tax cuts Loebsack referenced would add $13 to an average worker’s weekly paycheck. What he doesn’t say is how the price you pay for good and services will increase due to the Obama tax hikes on businesses. Businesses will in turn pass this increase on to you, which will erase the $13 and more than likely put you into a higher tax bracket as well.
Greater investment is needed, but the federal government’s responsibility should be focused on infrastructure and defense as per the Constitution. There are more than 9,000 earmarks in this bill. Including $1.7 million to study a cure for hog odor submitted my Senator Harkin. Another $200 million to re-sod the National Mall after the inauguration destroyed it. Plus millions more to pay for abortions in foreign countries. Some may believe that some earmarks have merit, and if they do, they will have no problem passing in the House and Senate after honest and open debate.
What Congressman Loebsack fails to understand is that we’re in a crisis that requires clear thinking, business minded, common sense solutions. So as an alternative, I have presented a simple three page “Economic Proposal” including analysis that demonstrates a credible, approach that will solve our problem instead of Republican rhetoric.
#1 I’m proposing we declare an income tax, payroll tax and corporate tax holiday for 60 days. In other words, the government does not take any federal taxes out of your paycheck for 60 days. This reflects an immediate $416.7 billion stimulus impact to the economy and relief to everyone earning a paycheck in the United States. The total loss in tax revenue to the government translates to around $47.7 billion which is the difference between the cost of a tax holiday and the total stimulative impact. I estimate that the tax break on the corporate payroll tax match alone will enable corporations to create/save up to 2.6 million jobs averaging $50,000.00 per year. In addition, consumers (you and me) will have an average of $290 (tax free) per week in their pay checks to use as they see fit for 60 days. The stimulative impact would be immediate vs. the two years in the Obama/Democrat package. The benefit is fair and easy to calculate, it’s basically 1/3 of most Americans’ pay checks. The people in the lower income brackets that normally get hammered stand the most to gain.
Income Tax Decrease
#2 After the 60 day tax holiday, income taxes fall from 30%-25%.The permanent, across-the-board decrease in income taxes will add $33 to the average weekly pay check, or over $132 per month. That’s the kind of money that can help buy a car, save a house, and do any number of other things that some people in the government feel only they can provide. My proposal puts the money into the people’s pockets, and empowers them to save themselves.
15% Corporate Tax Rates
#3 The current corporate tax rate in the US is 35%, the 3rd highest in the world which translates into annual tax revenue of $304 billion. This is crippling U.S. businesses and forcing them to do business overseas or in Mexico. I want to reduce that tax rate to 15% which translates into $130 billion in annual corporate tax revenue. That puts $173 billion back into the corporations. Now, not all corporations will reinvest in themselves, but I believe that at least 97% will. That is $173 billion dollars of instant corporate stimulus to invest in technology, machinery, brick and mortar and jobs.
According to Moodys, a permanent reduction in corporate income tax rates would provide a stimulative benefit to the economy of 30 cents for every dollar of tax reduction, or $52.1 billion dollars, and much more after taking into consideration that people will spend it. Therefore, the net cost to the government or loss of tax revenue would be $121.6 billion dollars, which would be made up due to the potential creation of up to 3.5 million jobs averaging $50,000.00 per year in wages. Each new job has an annual tax benefit to the government of $15,000 in payroll and income taxes, which means every million new jobs puts $15 billion annually into government coffers, resulting in a pay down of the debt while actually growing the economy. As you can see the potential jobs created or saved equal the $778 billion Obama/Democrat “Spending” bill for a fraction of the cost.
The best way to dig ourselves out of this mess is through hard work and personal responsibility. Capitalism does work, in fact 5 % of the world’s population lives in the United States and that 5% creates 70 % of the world’s wealth. What’s the connection? Our system works, and it has worked for more than 200 years. We’ve hit a huge bump in the road, but it’s a bump that we created by mistakes an oversized government made. Reduce the size of government, put the money and the power into the hands of the American people and we will work our way out of this. No more Bailouts, TARP or TARP 2, and spending bills.
I believe the people of the Second District deserve the truth. So I encourage Congressman Loebsack to be honest and explain the facts regarding the Bill that has saddled our children and grandchildren with insurmountable debt for generations to come.
Steven R. Rathje
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