WASHINGTON, Nov. 17 ATR-Norquist-letter
WASHINGTON, Nov. 17 /PRNewswire-USNewswire/ -- Americans for Tax Reform president Grover Norquist today sent the following letter to the U.S. Treasury Department requesting the full $700 billion in TARP funds:
November 17, 2008
Mr. Neel Kashkari
Interim Assistant Secretary for Financial Stability
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Dear Secretary Kashkari:
I write today to formally request $700 billion from the TARP Capital Purchase Program. Since unionized auto companies, state and local governments, and certain credit card companies are applying, I thought I should, as well. Attached you will find the two-page application which I downloaded from www.treas.gov.
I am fully aware that some $125 billion has already been allocated as of October 29, 2008. However, given that the federal government has the full weight of the army, the FBI, etc. behind it, I am confident that you can re-appropriate this money from the likes of Wells Fargo (or their successor companies, if the current over-regulatory and over-taxing economic climate has caused them to go under).
I have a plan for this $700 billion which should be just what's needed to get the American economy going. Since the money came from the taxpayers in the first place, I propose giving it back to them. With $700 billion in TARP funding, ATR would facilitate the following tax cuts:
- Cut the corporate income tax rate from 35% to 15%, giving us one of the lowest corporate income tax rates in the developed world. We currently have the second-highest rate in the world (behind only Japan). This new 15% rate would give us the third-lowest rate in the world (ahead of only Ireland and Iceland). It would put us well below the Euro-zone average rate of 25%. Companies would be dying to set up shop in the United States. Estimated JCT cost: $170 billion (1)
- Eliminate the capital gains and dividends tax. These rates are currently 15%, but actually represent a double-tax on corporate profits. When combined with the new, lower 15% rate on corporate income, capital costs would be at their lowest levels in nearly a century. Tax something less, and get more of it. This would also be an improvement over a suggested change we have made to the Treasury for years -- allow taxpayers to index the cost basis of their capital assets to inflation (something which Treasury has the unilateral authority to do and which would be the equivalent of a 50% cut in the capital gains tax rate). Estimated JCT cost: $35 billion (2)
- Cut the top personal income tax rate from 35% to a flat 15%. This would give the U.S. the lowest personal income tax rate in the developed world. Estimated JCT score: $235 billion (3)
- Kill the death tax. Almost nothing is more capital-killing for small businesses and family farms than the estate, gift, and generation-skipping transfer taxes. Estimated JCT score: $24 billion (4)
- Allow companies to fully-expense capital assets purchased the first year. Under current law, businesses and other taxpayers must usually "depreciate," or slowly-deduct, capital asset purchases the first year. This capital-boosting proposal would allow taxpayers to deduct 100% of the purchase price from their taxes in year one. Estimated JCT score: $240 billion (5)
Put all that together, and you arrive at almost exactly $700 billion. It's safe to say that allocating $700 billion this year toward these tax reduction goals would do much for economic growth. But there's more that can be done that doesn't require any more resources:
- Ensure that there is full transparency in the TARP program by putting every TARP transaction and contract online for everyone to see. Disclose potential conflicts of interest with TARP-oversight staff.
- Allow companies to repatriate foreign profits to the U.S. without having to pay a double tax. The last time Congress allowed this in 2005, over $300 billion was repatriated, boosting GDP 2%.
I look forward to receiving the money. Please consult my staff for any ACH transfer information your people may need.
Sincerely,
Grover Norquist
Americans for Tax Reform is a non-partisan coalition of taxpayers and taxpayer groups who oppose all tax increases. For more information or to arrange an interview please contact John Kartch at jkartch@atr.org.
Notes:
1) Assumes current CIT revenue of 2% of
$15 trillion GDP. Static score reduction of 57% to account for rate reduction from 35% to 15%
2) Based on 2006 IRS data (Table 3.4 SOI):
http://www.irs.gov/pub/irs-soi/06in34tr.xls
3) Based on IRS data (score is the difference between actual 2006 ordinary modified taxable income at a 15% flat tax rate and actual 2006 ordinary income tax generated)
4) Sum total of estate, gift, and generation-skipping transfer tax receipts from 2004
http://www.irs.gov/pub/irs-soi/04es02yd.xls
5) Assumes gross domestic private investment of
$2 trillion. Assumes 15% flat tax rate. Assumes current-law depreciation rate of 20% annually. Current law revenue loss minus full expensing revenue loss is the result.
http://bea.gov/national/nipaweb/TableView.asp?SelectedTable=122&Freq=Year&FirstYear=2006&LastYear=2007
SOURCE Americans for Tax Reform
