Wednesday, January 14, 2009

Garrett Authors Alternative Stimulus

Representative Scott Garrett has answered the call of Representative Eric Cantor to introduce alternative economic stimulus packages. As with Garrett's previous piece, there is a 10% tax cut for corporations. However, this piece seems to be a vast improvement over his last set of proposals, including more tax cuts for families and individuals.

There's been a ton of press already, but The National Review lists off some of the things most people would agree are a good idea:
— An increase in the child tax credit from $1,000 to $5,000.
— An increase in the deduction for college expenses from $4,000 to $6,000,
and in the income threshold at which the deduction can be taken.
— An end to mandatory IRA withdrawals at age 70 1/2.
— The plan would also let people of any age draw down their IRA money
without taxes or penalties in calendar 2009.

The only big issue with this is what it does to the deficit. Garrett "pays" for the program with a 1% cut across the board on non-defense discretionary spending. Depending on whether or not War on Terror funds are included, this cut represents a savings between $4 to $6 billion. The corporate tax cut could reduce revenues upwards of $30 billion alone.

While the math may not add up now, Garrett adding more than simply corporate tax cuts to his proposal shows he's taken heed of the criticisms leveled at his last effort. It's a positive step forward for our Congressman, and I wouldn't be surprised to see several of these proposals included in President-Elect Obama's final proposal.

No comments: